Who Will Administer My Social Security Income if I Become Incapacitated?

April was been designated as “Social Security Month.” To bring awareness to this important income source, we would like to share a client’s story and provide some information about Social Security.

Joanne was in a nursing home, and it seemed as though she would not be able to leave any time soon. Eddy & Schein was called up to aid in the successful effort to bring her home. At that time, Gideon Schein was appointed her agent under power of attorney.

When we onboard a new client, one of our initial activities is to identify sources of income. In doing so, we determined that Joanne was no longer receiving her Social Security checks. When we asked where they were going, the Social Security Administration (SSA) told us they could not speak to us, since we were not her representative payee, nor would they tell us who the representative payee was.

Gideon went to the SSA with Joanne’s elder law attorney and learned that Joanne’s Social Security income was being paid to the nursing home and that the nursing home was the representative payee. Gideon needed to apply to become Joanne’s new representative payee in order to instruct Social Security to pay her directly, especially since she had returned to her apartment by this point in time.

Social Security is an important source of income for many retired Americans and is generally managed similarly to any other income source. The Social Security Administration presumes an adult is capable of managing his or her own benefits. However, once a loved one becomes either temporarily or permanently “incapacitated,” the rules change dramatically.

The Treasury Department does not recognize a power of attorney for negotiating federal payments, including Social Security or Supplemental Security Income (SSI) checks. This means, if you are acting as an agent under power of attorney for someone who is incapable of managing his or her own benefits, you must apply to serve as his or her representative payee for Social Security. With this designation, you will be able to endorse/deposit or spend the funds from Social Security.

A representative payee is a person or an organization approved by the SSA to receive the Social Security or SSI benefits for a recipient who cannot manage or direct the management of his or her benefits. Once declared a representative payee, a person or organization is then able to use the funds for basic needs of the Social Security recipient—housing, utilities, food, and other necessities. The representative payee will be required to file regular reports detailing the use of the recipient’s funds. Through the SSA website, a representative payee may also create online access to track payments and collect subsequent tax forms from Social Security. 

Some things to be aware of:

  • No individual may receive payment for acting as a representative payee. However, certain qualified organizational payees may be approved in writing by Social Security to collect a fee.
  • If necessary, the appointed representative payee can be changed to another person or organization, as happened in the case of Joanne.
  • When acting as an agent under power of attorney for someone, it is important to become familiar with the Social Security benefits regulations, as they regard representative payees.

If you have questions about becoming a representative payee, you may call us at 212-987-1427 or the SSA at 1-800-772-1213 between 7 A.M. and 7 P.M. on business days, or contact your local Social Security office between 9 A.M. and 4 P.M. on business days. There are additional resources and information at www.socialsecurity.gov/payee

Rebecca Schein Gideon Y. Schein,
Rebecca R. Eddy
Partner/Co-Founder
Gideon Y. Schein
Partner/Co-Founder

 

 

Eddy & Schein
212. 987.1427
NYmail@eddyandschein.com

626.395.7572
CAmail@eddyandschein.com

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