(a) Payments certified to a representative payee shall be
considered as having been applied for the use and benefit of the
beneficiary when they are used for the beneficiary's current
maintenance--i.e., to replace current income lost because of the
disability of the beneficiary. Where a beneficiary is receiving care in
an institution, current maintenance shall include the customary charges
made by the institution and charges made for the current and
foreseeable needs of the beneficiary which are not met by the
institution.
(b) Payments certified to a representative payee which are not
needed for the current maintenance of the beneficiary, except as they
may be used under Sec. 725.512, shall be conserved or invested on the
beneficiary's behalf. Preferred investments are U.S. savings bonds
which shall be purchased in accordance with applicable regulations of
the U.S. Treasury Department (31 CFR part 315). Surplus funds may also
be invested in accordance with the rules applicable to investment of
trust estates by trustees. For example, surplus funds may be deposited
in an interest or dividend bearing account in a bank or trust company
or in a savings and loan association if the account is either federally
insured or is otherwise insured in accordance with State law
requirements. Surplus funds deposited in an interest or dividend
bearing account in a bank or trust company or in a savings and loan
association must be in a form of account which clearly shows that the
representative payee has only a fiduciary, and not a personal, interest
in the funds. The preferred forms of such accounts are as follows:
Name of beneficiary----------------------------------------------------
by (Name of representative payee) representative payee,
or (Name of beneficiary)
by (Name of representative payee) trustee,
U.S. savings bonds purchased with surplus funds by a
representative payee for an incapacitated adult beneficiary should
be registered as follows: (Name of beneficiary) (Social Security
No.), for whom (Name of payee) is representative payee for black
lung benefits.
