Marshall Parker & Associates - PA Elder Law, Estate Planning, Long Term Care Resource Center

Marshalll Parker & Associates - PA Elder Law, Estate Planning, Long Term Care Resource Center Elder Law Firm

What is a Representative Payee?

Written By: Attorney Jeffrey A. Marshall CELA*

Published in the Lock Haven Express and Hazleton Panorama (March 2006)

Most people who receive federal benefits are able to manage their own financial affairs. However, some beneficiaries are unable to manage their benefits because of physical and mental problems. When this happens, the federal agency issuing the benefit check may appoint a representative payee to manage the benefit amount.

The following government agencies administer these programs:

∙ Social Security Administration (SSA);

∙ Department of Veterans Affairs (VA). The VA system calls the person appointed a fiduciary;

∙ Office of Personnel Management (OPM); and

∙ Railroad Retirement Board (RRB).

Each agency has its own rules for determining whether a payee is needed and who the appropriate person or program will be.

Social Security has the most representative payees. About 45 million people receive monthly benefits from Social Security. Over 10 percent have been determined to be unable to manage the funds themselves and have had a representative payee appointed to manage their benefits.

Unfortunately representative payees are not closely supervised. While SSA may engage in efforts to monitor the activity of representative payees, its ability to prevent and correct abuses is extremely limited.

The SSA Data Operations Center in Wilkes-Barre, Pennsylvania, receives roughly five million reports each year from representative payees. Another one million reports are hand carried to local SSA field offices by representative payees. The reports are based on the honor system and require no backup documentation to support the reported figures.

Unofficial estimates are that 30 percent of the reports handled in Wilkes-Barre result in follow-up calls to clarify the representative payee's information, and that 15 percent of those reports (750,000 or so) are forwarded to local field offices to deal with suspected abuse.

In the eyes of the SSA, the periodic reports make it a safer arrangement than a power of attorney, since a power of attorney need not require any periodic accounting by the agent. However, the representative payee arrangement offers fewer protections than found in a court-supervised guardianship.

If you are a representative payee, or may need to intervene to assist a family member or friend who is having trouble handling their government retirement benefits, check out

Social Security Administration (SSA) Publication No. 05-10076 titled, A Guide for Representative Payees. It is available from SSA at 1-800-772-1213 or online at http://ssa.gov/pubs/10076.htm.

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