Representative Payee: To Be, or Not To Be?
By Kathy Day
Disclaimer: The following information is NOT intended as legal advice. It is information I gathered from experience and by educating myself. Every situation is different and every person is different. Please make choices based on your own experience.
When your loved one received benefits from Social Security (SSI or SSDI), they may be required to have a Representative Payee (someone who handles the benefits on behalf of the beneficiary). It is difficult to choose whether to act as payee for your family member, or whether to transfer payee responsibilities to a neutral third party. There are professional agencies who perform this service for a very small fee, and some mental health agencies will also act as payee. It’s best do your research before deciding.
In my experience, having a family member act as payee is not necessarily best. When you come between your loved one and his/her money, it can be awkward at best and dangerous at worst. If you act as payee, you must be able to firmly establish ground rules for your role as payee. You must also abide by the rules established by Social Security on what the payee’s responsibilities are.
If you choose to act as payee, you will have more discretion on how the money is spent. There will be less red tape than there would be if you were to use a third party payee. If you use a third party payee, your loved one will often have to purchase items first and then submit receipts in order to get reimbursed. If you act as payee, you can purchase items for your loved one directly. If you want to encourage independence in your loved one, it may be easier by using a third party payee, as your loved one can then interact with the payee directly.
If your family member lives with you, make sure you have an agreement to charge for room and board. You can set any amount that you and your loved one agree upon. This way you can be sure to be paid for living expenses to help your loved one understand that there is a cost to living in your home. Charging room and board also reduces the amount of cash your loved one has. This is good, especially if there is a co-occurring substance use disorder.
If you incur any expenses on behalf of your loved one, make sure you pay yourself back (if you’re payee) or submit an expense report to the payee (if you use a third party). Receipts are important to establish what the funds are used for. For instance, if your loved one is has medical appointments or legal appointments that you transport them to, make sure you’re reimbursed for mileage and parking.
These are just a few suggestions for family members who are required to have a payee. If you have any other suggestions, please contact us using the contact us form on the website.