A representative payee is someone who manages Social Security benefits on behalf of another person. Here's what you need to know about this important role and whether it applies to you.
In this article, we'll cover:
- What a representative payee does
- When a payee is required
- How payees are selected
- Payee responsibilities and rules
1. What a Representative Payee Does
Primary role: A representative payee receives and manages Social Security benefits on behalf of someone who can't manage their own finances.
Key responsibilities:
- Receive the beneficiary's check or direct deposit
- Use funds for the beneficiary's needs
- Pay for food, housing, clothing, medical care
- Save any leftover funds for the beneficiary
- Keep records of how money is spent
- Report changes to Social Security
Who they serve:
- Adults who can't manage money due to disability
- Minor children receiving benefits
- Legally incompetent adults
- Anyone SSA determines needs help
2. When a Payee Is Required
SSA may require a payee if:
- You're under 18
- You have a legal guardian or conservator
- SSA determines you can't manage finances
- Your disability affects decision-making
- You have a history of mismanaging funds
Assessment process:
- SSA evaluates your capability
- May consider medical evidence
- May interview you
- Looks at past money management
- Can be triggered by reports from others
You may not need a payee if:
- You manage money well
- You have no legal guardian
- Your disability doesn't affect financial decisions
- You demonstrate capability to SSA
Important: Having a payee is not permanent. You can request a review if your situation changes.
3. How Payees Are Selected
Who can be a payee:
- Family members (spouse, parent, adult child)
- Friends
- Social service agencies
- Nursing homes or care facilities
- Non-profit organizations
- State or local government agencies
Selection priority:
- Legal guardian or court-appointed fiduciary
- Spouse (or parent for children)
- Family member caring for beneficiary
- Close friend caring for beneficiary
- Authorized organization
The application process:
- Potential payee completes SSA-11 form
- Provides identification
- Undergoes background check
- SSA interviews them
- Must explain relationship to beneficiary
You can suggest a payee:
- Tell SSA who you'd prefer
- They'll consider your wishes
- Final decision is SSA's
- Preference not guaranteed
4. Payee Responsibilities and Rules
Financial duties:
- Use benefits for beneficiary's current needs
- Pay for food, shelter, utilities first
- Then clothing, medical, personal needs
- Save excess in interest-bearing account
- Keep funds separate from personal money
Record keeping:
- Track all spending
- Keep receipts
- Document how funds were used
- Be ready for SSA audits
Annual accounting:
- Complete Representative Payee Report
- Form SSA-6230 or SSA-6233
- Due every year
- Explains how funds were spent
- Failure to submit can result in removal
Prohibited actions:
- Using funds for themselves
- Mixing funds with personal accounts
- Charging fees (unless authorized)
- Neglecting beneficiary's needs
- Making risky investments
How to change or remove a payee:
- Request review from SSA
- Explain why change is needed
- Provide evidence of capability (to manage own funds)
- SSA will investigate
Special Situations
Organizational payees:
- May charge small fee (SSA-approved)
- Must be bonded and insured
- Subject to additional oversight
- Good option when no family available
Dedicated accounts (child SSI):
- Large back payments for children
- Must go in dedicated account
- Limited use (education, medical, etc.)
- Not for regular expenses
How Purple Helps
Purple works with representative payees:
- Payees can manage beneficiary accounts
- Clear transaction history
- Easy record keeping for reports
- Track spending by category
- Simplify annual accounting