Guide for Organizational Representative Payees

What is proper use of benefits?

You must ensure that payments are used to meet the beneficiary's immediate day-to-day needs for food and housing. After these needs are met, funds may be used for the beneficiary's personal needs such as recreation and miscellaneous expenses. You may also use funds to pay for medical and dental care not covered by Medicare, Medicaid or provided by a residential institution. You must first meet the beneficiary's current and reasonably foreseeable needs and then save the remaining funds. You will receive the Social Security and/or SSI payments on behalf of the beneficiary and it is your responsibility to spend the funds in the best interest of the beneficiary. You need to consider the beneficiary’s wishes as much as possible, but you do have the final say. In addition, we encourage you to communicate regularly with the beneficiary.

Current Maintenance Needs

Payees must always be aware of the beneficiary's current maintenance needs and ensure they are met to the extent possible based on the available income. Current needs should never be sacrificed to pay other expenses or past due bills. Current needs include food, clothing, housing, medical care and personal comfort items such as a radio, television, chair, etc.

Institutionalized Beneficiaries

It is SSA's policy that representative payees of all institutionalized beneficiaries must provide at least $30 monthly for the beneficiaries' personal needs.

Acceptable Personal Needs Expenditures

Some examples of acceptable personal needs expenditures are:

• health and hygiene items - soaps, toilet articles, cosmetics, combs, brushes, bath scale, dermatology treatments, cosmetic surgery, elective or cosmetic dental treatments, etc;

• clothing such as caps, scarves, gloves, bathing suits and caps, seasonal garments, shoes, boots, slippers, athletic shoes, disability-related adaptive clothing, etc;

• convenience items such as radios, TVs, clocks, cassette/CD players, clothes hamper, stationery, wristwatches, etc.;

• living area furnishings such as carpets, curtains, blankets, bedspreads, quilts, pictures, posters, mirrors, pillows, lockable chest/trunk, rocking chair, recliner, etc;

• therapeutic equipment-if recommended by a doctor or appropriate therapist, and not covered by any other source: hearing aids, electric wheelchairs, orthopedic shoes, shower and bathroom chairs, walkers, crawlers, book holders, feeding aids, toilet aids, etc.;

• transportation expenses-trips to visit family or for relatives to visit the beneficiary in special cases, trips to amusement parks, State Fairs, summer camps, etc.;

• hobby and craft items-art supplies, photo albums, cameras, film, cassette tapes, video cassettes, etc.; and

• miscellaneous items-magazine subscriptions, reasonably priced holiday presents for family/friends, telephone calls to or from out-of-town relatives, restaurant meals, etc.

If the beneficiary is receiving care in a federal, state or private institution and not receiving Medicaid payments for his or her care, current maintenance includes the institution's charges and expenditures for items that will aid in the beneficiary's recovery or release or improve the beneficiary's condition.

For institutionalized Social Security (not SSI) beneficiaries whose current maintenance needs are being met, you may use part of the funds to support the beneficiary's legally dependent spouse, child, and/or parent. If you have any questions on this provision, contact your local Social Security office.

Other Expenditures

Group Purchases – You may pool the personal funds of several institutionalized beneficiaries to make group purchases provided SSA approval is obtained prior to the purchase. Submit your request to your local SSA office.

Claims of Creditors – You may satisfy the beneficiary’s debt that arose before the month in which you received payment for Social Security and/or SSI benefit payments if the beneficiary's current and reasonably foreseeable needs are met. When your organization is also a creditor , such as a landlord or an institution, you must get SSA's approval before reimbursing your organization for any debts owed to your organization.

Guardianship Fees - If you are a legal guardian for an incompetent beneficiary, a reasonable part of the beneficiary's funds may be used for customary guardianship fees, provided the guardianship is in the beneficiary's best interests.

A court must authorize and monitor these fees.

Paying legal guardianship fees would not constitute proper use of benefits in the following situations:

• guardianship costs and fees are included as part of a state's support obligation to the beneficiary, or if you have been authorized by SSA to receive a fee for services from the beneficiary (See http://www.ssa.gov/payee/NewGuide/payment.htm for information about fee for service payees.);

• costs or fees related to an unsuccessful petition for guardianship; or

• the beneficiary's funds will be depleted by the guardianship costs to the point where the beneficiary's personal needs are not being met.

Out of Pocket Expenses - You may be reimbursed for reasonable out-of-pocket expenses that are actual expenses for food, housing, medical items, clothing, transportation and personal needs items incurred on behalf of the beneficiary. For example, if the cost of transporting the beneficiary to a doctor's appointment (such as bus fare or mileage) is paid from your organization's funds, this is considered an out-of-pocket expense. The amount your organization may be reimbursed must correspond to the actual expense incurred for the individual beneficiary. You must keep records of your expenses.

If you are collecting a fee for payee services, you are not authorized to be reimbursed for any expenses that are considered "overhead”. For example, expenses such as postage, office equipment, photocopying, etc. are already included in your fee for payee services.

Payment for Representative Payee Services - Certain organizational payees are authorized to collect a fee for their services if they are qualified to do so under the law, and have been approved by SSA to be a "fee for service" payee. (See http://www.ssa.gov/payee/NewGuide/payment.htm for an additional discussion of this provision.)

Insurance - Purchasing life insurance or a prepaid burial contract is an acceptable use of funds, unless:

• premiums diminish available funds to the point where the beneficiary's current maintenance needs are not being met;

• there is a conflict of interest (for example, if the payee is heir to the estate); or

• an institutional payee normally uses funds from another source to purchase insurance for a non-beneficiary.  

NOTE: The beneficiary must always be the owner of the policy.

If you plan to purchase life insurance or a burial contract for an SSI beneficiary, you should contact your local Social Security office to find out how this purchase may affect SSI eligibility.