Social Security Benefits

For Social Security purposes, an adult beneficiary is presumed capable of managing or directing someone else to manage the benefits to which he/she is entitled unless there are indicators or evidence to the contrary.

Social Security's guiding principal in the decision of whether or not to certify payments through a representative payee is to ensure the physical, mental and emotional well-being of the beneficiary in a manner which both preserves dignity and protects rights. The decision to appoint a representative payee is never made as a convenience or choice of a beneficiary but rather it is a decision based on the beneficiary's capability.

Capability refers to a beneficiary's ability to manage or direct the management of his/her Social Security funds. This means that a beneficiary who is housebound due to illness or injury but who is mentally capable of directing others in the management of his/her benefits may not be found to be in need of a payee by Social Security. He/she may not be physically capable of going out to cash a check or pay his/her bills but can manage or direct others to this for him/her. On the other hand, if a beneficiary is physically capable of getting out but is suffering from a mental condition and is letting his/her bills go unpaid, or no longer comprehends the value of money, he/she most likely will need to have a payee appointed.

The issue of a beneficiary's capability may be raised by the beneficiary, Social Security or a third party. A third party may be a beneficiary's friend, relative, healthcare provider, social services caseworker, etc. In any case, a capability determination is needed to evaluate the need to appoint a payee.

That determination will require obtaining acceptable evidence of capability.

This evidence can be in three forms: legal, medical or lay evidence.

Legal evidence is required only where there is an allegation that the beneficiary is legally incompetent. Evidence of legal incompetence usually takes the form of a court order appointing a legal guardian. Note that the appointment of a legal guardian does not necessarily mean that a person is incompetent. The court order must specifically address legal competence or the ability of the person to handle his/her own financial affairs. If legal evidence establishes that a beneficiary is incompetent to manage or direct someone else to manage his/her benefits, the beneficiary must have a payee appointed and no further evidence is necessary. Power-of-Attorney is not recognized for Social Security matters. Appointment of a representative payee by Social Security is only valid for Social Security matters.

Medical evidence along with lay evidence can be used to make a capability determination in the absence of legal evidence. Medical evidence is an opinion offered by a medical professional (physician, psychologist, etc.) based on an examination of the beneficiary. Medical evidence can be outweighed by lay evidence.

Lay evidence is anything other than legal or medical evidence which gives insight into a person's ability to manage or direct the management of his/her financial affairs. In the absence of legal evidence, lay evidence must be obtained in all cases. Lay evidence includes, the observations of the Social Security caseworker, signed statements from the beneficiary's relatives, friends, healthcare providers, etc. These observations or statements must address the beneficiary's behavior, ability to reason, ability to manage funds, meet his/her own daily living needs, etc.

When there is an allegation that a beneficiary is not capable of managing his/her needs, Social Security first determines if there exists a court order of legal incompetence. In the absence of such, Social Security then requests a medical evidence determination from the beneficiary's primary physician/mental health provider. A lay determination is also done by Social Security documenting observations on the beneficiary and/or the allegations of third parties such as relatives and or friends. A lay determination and a medical determination may conflict. In such a case, the Social Security caseworker would make a determination based upon the most convincing evidence. The doctor may have had only limited time with the beneficiary while the friends, relatives and caseworkers may know more about the beneficiary from a historical point of view.

The Social Security Administration reviews and screens each person who applies to be representative payee for a beneficiary. In determining the best payee choice, Social Security considers all factors including the applicant's relationship to the beneficiary, the applicant's interest in the beneficiary's well-being and whether or not the applicant has custody of the beneficiary.

Institutions can file to be payee for residents of their facilities. However, Social Security first makes sure that there are no qualified payees outside of the institution who might better serve the beneficiary's interests. This includes family members who demonstrate interest in the beneficiary, even if they do not have custody.

Once appointed as a payee, you are able to sign and cash the beneficiary's Social Security benefits. With the beneficiary's funds, you are responsible for paying the beneficiary's living expenses and seeing to it that the beneficiary has food and clothing as needed. The payee can handle most Social Security affairs and sign paperwork for the beneficiary. The payee is required to report changes for the beneficiary to Social Security. The payee is periodically asked to complete a form accounting for the use of the beneficiary's funds. The payee's own Social Security record and other financial affairs are not affected by serving as payee. A person who has a payee himself cannot serve as payee for someone else.

The Social Security Administration recommends that you contact your nearest Social Security office by calling 1-800-772 -1213 if you have any concerns regarding representative payee issues for a beneficiary. Social Security will determine what evidence is needed and if a payee should be appointed.