If your elderly loved one is no longer able to handle his or her own finances, you may have heard the term “representative payee” mentioned once or twice. But what exactly is a representative payee, and how do you know if your senior needs one? The following information should help you make an informed decision about planning your loved one’s financial future.

What is a representative payee?

A representative payee, or rep payee, is someone who receives and manages Social Security, Supplemental Security Insurance (SSI), or Retirement, Survivors and Disability Insurance (RSDI) payments from the Social Security Administration (SSA) on behalf of an individual who cannot manage his or her own funds. The role of the representative payee is to use any funds received for the benefit of the individual in question.

Is there payment involved for being a representative payee?

Both individuals and organizations can apply to be representative payees; however, individuals are not compensated in any way for their services. Instead, they are often close friends or family members of the original payee who want to protect and look after their loved one’s interests. The exception is when the representative payee is an organization, a situation that often occurs because the individual’s family members are deceased, unwilling or unable to assist, or simply cannot be located.
In the event that the representative payee is an organization, or “fee-for-service” payee, a fee of no more than $30 a month can be charged to the beneficiary. In order to qualify as an organizational representative payee, the agency must be non-profit and pre-established with the SSA.

How do I know if my loved one needs a representative payee?

There are certain situations which definitely call for a representative payee, such as when the original payee is completely incapable of handling their own finances. Circumstances like these include the payee being in a coma, or the later stages of dementia. In such instances, it is likely the individual is either completely unable to communicate, or has lost the higher functioning needed to manage money.
However, rarely are cases so clear cut. The majority of them will lead concerned loved ones to question whether the senior is, in fact, capable of using their benefits properly. For example, they may be in the beginning or middle stages of dementia, where they are coherent at times, but incoherent at others. In these cases, it is best to consult the individual’s physician regarding their opinion of the senior’s mental facilities. Note that simply disagreeing with an individual’s monetary decisions is not grounds for becoming their representative payee; you must show evidence they cannot make rational decisions. Which leads us to . . .

How to become representative payee

The first step in applying to be a representative payee is to contact the SSA office and request form SSA-ll: “Request To Be Selected As Payee.” An in-person interview may be required, although at times it is possible for the application to be completed by phone. You will need information such as:

• The beneficiary’s name and current address
• The reason the beneficiary needs a representative payee (i.e., their diagnosis)
• The name and address of the beneficiary’s primary physician
• The beneficiary’s checking account number and routing number (if direct deposit is selected)
• Documentation of the representative payee’s relationship to the beneficiary (for example, Power of Attorney documents)
• An explanation of how the representative payee plans to stay informed about the needs of the beneficiary

Please note that there are certain things representative payees cannot do, including using funds they receive from the SSA for anything other than the beneficiary’s needs.

Should you become a representative payee?

As you can see, the decision whether or not to apply for representative payee status is not one to take lightly. A lot depends on your loved one’s mental abilities, financial circumstances, and your own personal comfort with taking on this important role. However, should you decide to do so, becoming a representative payee for your senior is a concrete way to protect their financial future.
If you are unsure of how to best help an aging loved one, the trained and compassionate staff at the Institute on Aging is here to help you make that decision and gain the best in at-home senior care. Contact us to find out more.