Q. I hear that there is some news from Social Security, in that it will now allow recipients to name a Representative Payee in advance of actual need. Is this important and do you know about it?
A. Yes, and it is considered a major change for social security. So, first, let’s address what a Representative Payee is:
In the Social Security system, a representative payee is a person or organization appointed to receive funds for someone, who is unable to manage their own money or pay their own bills. A representative payee (“RP”) would have the power and the responsibility to manage those funds for the beneficiary’s benefit, whether thye be Social Security Retirement, Supplemental Security Income (“SSI”), or Special Veterans Benefits. The RP is essentially a fiduciary for the beneficiary and must be careful about handling the beneficiary’s money, must keep good records, and make annual accountings to social security as to how the money was spent.
Up until now, anyone could apply to be the RP for a beneficiary who was deemed unable to manage his or her funds, which could encourage “bad actors” to get involved. Further, there was no mechanism for a competent recipient to make an advance designation as to who should be his or her RP. In this respect, the situation has always been very unlike the advance designation that one could always make in one’s estate planning documents as to who would his or her Trustee, Executor, Agent Under Financial Power of Attorney, and Agent for Health Care.
But now you can! This new right stems from the “Strengthening Protections for Social Security Beneficiaries Act of 2018”, and now allows you to choose an individual to manage your benefits whom you know has genuine concern for your well-being, should the need later arise. The advance designation can be made by competent adults and emancipated minors. You may select up to three individuals, in the order that you designate. If the need later arises for an RP, social security will contact those individuals on your behalf, but will still verify that they are suitable to serve. In addition, social security will send an annual reminder to you of your designations, so that you can update their identities and contact information as necessary.
You can make an advance designation in one of the following ways:
1) Online using your personal “mysocialsecurity”(www.ssa.gov/myaccount);
2) By telephone at 1-800-772-1213 (TTY: 1-800-325-0778);
3) In Person by going to your local field office, but only after it reopens following the COVID-19 closures.
So, along with your estate planning designations, you can now also do so as to your social security benefits. This is an important change for social security. Further, the process on line is simple and can usually be completed in less than 10 minutes.