SSA Amends Rules on Representative Payee Approval

The Social Security Administration (SSA) has published 84 FR 4323 in the Federal Register last week, a final rule on conducting background checks to prohibit persons convicted of certain crimes from serving as representative payees under the Social Security Act, as required by the Strengthening Protections for Social Security Beneficiaries Act of 2018. The rule will be effective March 18, 2019.

The SSA will be conducting background checks on new and existing representative payees. Individuals with certain felonies under state and federal law will not be permitted to serve as a representative payee. Representative payees manage benefit payments for beneficiaries or recipients who are incapable, due to a mental or physical impairment, of managing their Social Security, Special Veterans Benefits, or Supplemental Security Income (SSI) payments, or of directing another person to manage those payments. Generally, if a beneficiary or recipient is under age 18, SSA will pay benefits to a representative payee; however, in certain situations, SSA makes direct payments to a beneficiary under age 18 who shows the ability to manage their own benefits.

In cases where the beneficiary or recipient is 18 years or older, SSA selects a representative payee if it believes that payment of benefits through a representative payee, rather than direct payment to the beneficiary, will better serve the beneficiary's interest. A representative payee may be an organization, such as a social service agency, or a person, such as a parent, relative, or friend of the beneficiary. SSA requires a representative payee to use benefits in the beneficiary's best interest and, with certain exceptions, to report expenditures to us to ensure the representative payee is using funds appropriately.  SSA’s role is to investigate the potential representative payee to help ensure that the person or organization will perform the duties of a representative payee responsibly. It looks at factors such as the potential representative payee's relationship to the beneficiary, any past performance as a representative payee for other beneficiaries, and any criminal history.

Credit unions should also do their due diligence when a person or an organization requests to open a membership account with the intent to serve as a representative payee for someone receiving benefits from the Social Security Administration.  

You can view additional information and a new link that was added to the Representative Payees topic at NJCUL’s League InfoSight, regarding changes that become effective next month, by clicking here to access the site.

Looking for Compliance and Audit Solutions? Contact Nicola Foggie at nfoggie@njcul.org.