Prepared by Public Affairs 312-751-4777
The Railroad Retirement Board's policy is that every annuitant has the right
to manage his or her own benefits. However, when physical or mental
impairments make a railroad retirement annuitant incapable of properly handling
benefit payments, or where the Railroad Retirement Board (RRB) determines that
the interests of the annuitant so require, the RRB can appoint a representative
payee to act on the annuitant's behalf. A representative payee may be
either a person or an organization selected by the RRB to receive benefits on
behalf of an annuitant.
The following questions and answers provide information for family members,
or others, who may have to act on behalf of an annuitant.
1. Does the RRB have legal authority to
appoint a representative payee for an annuitant?
The
Railroad Retirement Act gives the RRB authority to determine whether direct
payment of benefits, or payment to a representative payee, will best serve an
annuitant’s interest. The RRB can appoint a representative payee regardless of
whether there has been a legal finding of incompetence or commitment and,
depending on the circumstances in a particular case, the RRB can select someone
other than the individual’s legal representative to be the representative payee.
2. What if a person has been given power of
attorney by a beneficiary?
Power of attorney is a legal process where one person grants another the
authority to transact certain business on his or her behalf; but the RRB, like
the Social Security Administration, does not recognize power of attorney for
purposes of managing benefit payments for a beneficiary. For this purpose, the
RRB uses the position of representative payee.
3. Why doesn’t the RRB recognize power of
attorney?
The Railroad Retirement Act protects a person’s right to receive benefits
directly and to use them as he or she sees fit by prohibiting the assignment of
benefits. Power of attorney creates an assignment-like situation that is
contrary to the protections given by this law. The Act likewise gives the RRB
exclusive jurisdiction in determining whether to appoint a representative payee
for an annuitant. If the RRB recognized power of attorney, it would be deferring
to a designation made by someone outside of the agency and would, in effect, be
abdicating its responsibility to the annuitant.
Also, events often occur which may affect an annuitant’s eligibility for
benefits. The responsibility for reporting these events to the RRB is placed, by
law, directly on the annuitant or the annuitant’s representative payee. When
benefits are accepted, the annuitant or his or her payee attests to a continued
eligibility for such benefits. And if payments are misused, they can be recouped
from the payee. This is not true with power of attorney.
4. How are these representative payees
selected?
Generally, the RRB’s local field offices determine the need for a representative
payee and interview potential payees. The field office also advises the payee of
his or her duties, monitors the payee, investigates any allegations of misuse of
funds, and changes the method of payment, or the payee, when appropriate.
The RRB provides 15 days’ advance notice to an annuitant of its intent to
appoint a representative payee, and the name of the payee, in order to allow the
annuitant a period of time in which to contest the appointment.
5. What are the primary duties and
responsibilities of a representative payee?
The payee must give first consideration to the annuitant’s day-to-day needs.
This includes paying for food, shelter, clothing, medical care and miscellaneous
personal needs. Beyond day-to-day needs, railroad retirement benefits may be
used for other expenses.
The payee is also responsible for reporting events to the RRB that affect the
individual’s annuity, and is required to account for the funds received on
behalf of the annuitant.
In addition, since railroad retirement benefits are subject to Federal income
tax, a representative payee is responsible for delivering the benefit
information statements issued each year by the RRB to the person handling the
annuitant’s tax matters.
Periodically, the payee will be asked to complete a report which includes
questions regarding how much of the railroad retirement benefits available
during the year were used for the support of the beneficiary, how much of the
benefits were saved, and how the savings were invested. In order to complete the
questionnaire correctly, a payee must keep current records of the railroad
retirement benefits received and how the benefits were used. The records should
be retained for four years.
6. What are a representative payee’s primary
responsibilities for an annuitant’s Medicare coverage?
When an annuitant requires covered medical services, the payee must have the
annuitant’s Medicare card available. The payee must also keep records of the
services received and the expenses incurred or paid, just as for any other usage
of railroad retirement benefits.
7. What if an annuitant is confined
to an institution?
When annuitants are in a nursing home, hospital or other institution, their
railroad retirement benefit payments should be used to meet the charges for
their current maintenance. Current maintenance includes the usual charges the
institution makes for providing care and services.
The payee should use the benefit payments to aid in the annuitant’s possible
recovery or release from the institution, or to improve his or her living
conditions while confined. Payments may be used to provide such items as
clothing, personal grooming supplies, transportation of relatives to visit the
patient, trial visits to relatives, medical and dental care, and reading
materials and hobby supplies.
8. How should railroad retirement benefits
not immediately required to meet an annuitant’s needs be handled?
Benefit payments which will not be needed in the near future must be saved or
invested unless they are needed for the support of the annuitant’s legally
dependent spouse or child, or to pay creditors under certain circumstances. It
is recommended that conserved funds be held in interest-bearing accounts.
Preferred investments are Federally-insured or State-insured accounts at
financial institutions and obligations of, or those backed by, the Federal
Government, such as U.S. Savings Bonds.
Funds should not be kept in the home, where they may be lost or stolen, nor can
they be mingled with the payee’s own funds or other funds.
9. How can a person get more information
about being appointed as a representative payee, or whether the use of railroad
retirement benefits for a particular purpose would be proper?
For more information, a person should contact the nearest office of the RRB.
Most RRB offices are open to the public from
9:00 a.m. to 3:30 p.m., Monday through Friday.
Persons can find the address and phone number of the RRB office serving their
area by calling the automated toll-free
RRB Help-Line at
1-800-808-0772. They can also get this information from the agency’s Web site at
www.rrb.gov.
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