When people need help managing their benefits, Social Security will not recognize or accept a General Power of Attorney. Instead, after a careful investigation, Social Security appoints a relative, friend, or other interested party to serve as the beneficiary's "Representative Payee."  This means the person's benefits are paid to the payee on the beneficiary's behalf, and the payee then takes care of the payee's financial business. This Representative Payee may, or may not, have General Power of Attorney as well.

How does Social Security choose a Representative Payee?

Appointment to be someone's representative payee isn't automatic.  Social Security tries to select someone who knows the recipient, who sees the recipient often, and who knows what his or her needs are.  For that reason, if the recipient is living with someone who already knows, and is helping, the recipient, they usually select that person to be the representative payee. 

What Does a Representative Payee Do?

A payee acts on behalf of the beneficiary.  A payee is responsible for everything related to benefits that a capable beneficiary would do for himself.  Social Security encourages payees to go beyond just managing finances and to be actively involved in the beneficiary's life.

A Social Security Representative Payee has the following obligations:

Determine the beneficiary's needs, and use the Social Security payments to meet those needs;

Save any money left after meeting the beneficiary's current needs in an interest bearing account or savings bonds for the beneficiary's future needs; 

Report back to Social Security any changes or events which could affect the beneficiary's eligibility for benefits or payment amount;

Keep records of all payments received and how they are spent and/or saved;

Provide benefit information to social service agencies or medical facilities that serve the beneficiary;

Help the beneficiary get medical treatment when necessary;

Complete written reports accounting for the use of funds;

Notify Social Security of any changes in the representative payee's or the beneficiary's circumstances that would affect the representative payee's performance or ability to continue as payee;

Return any payments to which the beneficiary is not entitled.

What Can't a Representative Payee Do?

A Representative Payee cannot:

Sign legal documents, other than Social Security documents, on behalf of a beneficiary (this is what a Power of Attorney is for);

Have legal authority over income from sources other than Social Security or SSI, such as earned income, pensions, or any other income source;

Use a beneficiary's money for the representative payee's own personal expenses;

Spend funds in a way that would leave the beneficiary without necessary items or services (housing, food, medical care);

Put a beneficiary's Social Security or SSI funds in the Representative Payee's own or another person's account. Checking and savings accounts must show the beneficiary as the only owner;

Keep any funds after giving up the position of Representative Payee;

Charge the beneficiary for services unless authorized by Social Security to do so.

How Does a Representative Payee Report to Social Security?

Usually the Social Security Administration will send a "Representative Payee Report" form once a year.  Keep clear records about how the beneficiary's money was spent or saved and the report will be fairly simple to complete.