When someone can't manage their own Social Security or SSI benefits—whether due to age, disability, or other circumstances—Social Security may appoint a representative payee to receive and manage the funds on their behalf. If you've been asked to serve as a representative payee for a family member, or if you're wondering whether you need one yourself, understanding how the system works can help you navigate this important responsibility.
In this article, we'll cover:
- What a representative payee is and why they're appointed
- Who can serve as a representative payee
- What responsibilities come with the role
- How benefits must be used and managed
- Reporting requirements and annual accounting
- How to become a representative payee for someone you care about
What Is a Representative Payee?
A representative payee is a person or organization appointed by Social Security to receive benefits on behalf of a beneficiary who is unable to manage their own money. The payee's job is to use those benefits to meet the beneficiary's basic needs and manage any remaining funds responsibly.
Social Security appoints representative payees when they determine that a beneficiary needs help managing their finances. This might be because the person is a minor child receiving benefits, has a mental illness or intellectual disability that affects their ability to manage money, has a physical disability or medical condition that limits their capacity, has dementia or cognitive decline, or has a substance abuse problem that impairs their financial judgment.
Having a representative payee doesn't mean the beneficiary has done anything wrong—it's simply a recognition that they need support managing their finances. The goal is to protect vulnerable people and ensure their benefits actually meet their needs.
Who Can Be a Representative Payee?
Social Security prefers to appoint individual payees who know the beneficiary personally. The priority order is generally a spouse or other relative living with the beneficiary, then a relative not living with the beneficiary, then a close friend, followed by a qualified organization.
Individual payees are usually unpaid—they volunteer to help a family member or friend. However, certain organizations that serve as payees (like social service agencies or professional payee services) can charge a fee, which Social Security deducts from the beneficiary's monthly payment.
To serve as a representative payee, you generally must be an adult (18 or older), be capable of managing finances responsibly, not have a felony conviction for certain crimes, not have been convicted of misusing someone's benefits, and complete an interview with Social Security.
Social Security conducts a background check on all prospective payees and may deny the appointment if there's reason to believe the person wouldn't act in the beneficiary's best interest.
Representative Payee Responsibilities
Being a representative payee is a legal responsibility, not just a family favor. Payees must use benefits to meet the beneficiary's current needs first. This includes food and housing, clothing and personal care items, medical and dental care not covered by insurance, and other necessities.
After current needs are met, payees should save any remaining funds for the beneficiary's future needs. These savings still belong to the beneficiary—they're not the payee's money to use for themselves or others.
Payees must also keep accurate records of how benefits are spent, keep the beneficiary's funds separate from their own money, report changes in the beneficiary's circumstances to Social Security, complete an annual accounting form reporting how funds were used, and notify Social Security if the beneficiary's condition improves or if they become capable of managing their own funds.
Managing and Using Benefits Properly
The cardinal rule of being a representative payee is that benefits must be used for the beneficiary's benefit only. You cannot use any portion of the benefits for yourself, your other family members, or anyone other than the beneficiary.
Current maintenance is the priority. Make sure the beneficiary's basic needs are covered: rent or mortgage, utilities, food, clothing, healthcare costs, and personal items like toiletries. These expenses come first, every month.
Saving excess funds is required if there's money left over after meeting current needs. These savings should be held for the beneficiary's future needs—perhaps for a security deposit on a future apartment, medical equipment, a wheelchair-accessible vehicle, or other significant expenses that may arise.
Keep funds separate. Never mix the beneficiary's money with your own. Open a dedicated bank account titled to show your representative payee relationship (for example, "Jane Smith, Rep Payee for John Smith"). This keeps things clear for recordkeeping and protects both of you.
Keep receipts and records. Document major expenditures so you can complete the annual accounting accurately and respond to any questions from Social Security. You don't need to keep every grocery receipt, but you should be able to account for where the money went.
Annual Reporting Requirements
Each year, Social Security requires representative payees to complete an accounting form (Form SSA-6230 for most individual payees) reporting how benefits were used during the previous year.
The form asks about how much was spent on food and housing, how much was spent on clothing, medical and dental care, and other personal items, how much was saved, and what the current balance of saved funds is.
Social Security reviews these forms to ensure benefits are being used appropriately. If your accounting raises red flags—like large amounts unaccounted for or savings that seem to have disappeared—Social Security may investigate further.
Failing to complete the annual accounting can result in being removed as representative payee, so make sure to respond to these forms promptly when they arrive.
Other Reporting Requirements
Beyond the annual accounting, representative payees must report certain changes to Social Security within 10 days. Reportable changes include changes in the beneficiary's living situation (like moving or going into a nursing home), changes in the beneficiary's income or resources, changes in the beneficiary's condition (improvement or worsening), the beneficiary's death, changes in your own situation if they affect your ability to serve as payee, and if the beneficiary becomes capable of managing their own funds.
Timely reporting protects both you and the beneficiary from overpayments and other complications.
What Representative Payees Cannot Do
There are important limitations on your authority as a representative payee. You cannot use benefits for yourself or others (this is misuse of benefits, which is illegal), make financial decisions beyond managing Social Security benefits, sign legal documents on behalf of the beneficiary (like contracts or leases) unless you have separate legal authority, access the beneficiary's other assets or accounts unless you have separate authority like power of attorney, or charge a fee for your services unless you're an authorized organizational payee.
Being a representative payee is strictly about managing Social Security benefits. It doesn't give you general control over the beneficiary's life or finances.
Becoming a Representative Payee
If you want to become a representative payee for someone, you'll need to complete an application with Social Security. The process involves contacting your local Social Security office to express interest, completing Form SSA-11 (Request to be Selected as Payee), participating in an interview with Social Security, providing documentation of your identity and relationship to the beneficiary, and consenting to a background check.
Social Security will evaluate your application based on your relationship to the beneficiary, your ability to manage finances, any criminal history, and what's in the best interest of the beneficiary. They may contact the beneficiary, their doctor, or others who know the situation before making a decision.
If appointed, you'll receive a letter confirming your status and instructions on how benefits will be paid. Benefits typically arrive via direct deposit to an account you control as representative payee.
Being a representative payee means managing someone's financial lifeline. Purple makes it easier with checking accounts designed specifically for representative payees—helping you keep beneficiary funds separate, track spending, and stay organized for your annual reporting.