Skip Ribbon Commands Skip to main content
Help (new window)
Navigate Up
Legal Services of New Jersey

Apply Online for Legal Help

Government Aid and Services
What is a Representative Payee?

A representative payee is a person who manages Social Security Disability (SSD) benefits for a benefit payee (the person receiving SSD or SSI benefits). The representative payee is responsible for using this money to meet the needs of the benefit payee—needs such as housing, utilities, food, medical, dental, personal care, clothing, and entertainment.

In a Social Security Disability case, the Social Security office handling the claimant’s case or the administrative law judge hearing the claimant’s case decides whether a person awarded disability benefits needs a representative payee. Generally, a benefit payee might be asked to have a representative payee if he or she suffers from a mental disability or a drug or alcohol addiction, or if he/she is a minor child.

What if I don’t want to have a representative payee?

If the Social Security Administration decides that you need a representative payee, you can challenge that determination. You will need to demonstrate that you can handle your own finances, which can be done by providing a doctor’s letter indicating that your condition has changed and you are able to manage your money. You can also provide letters from friends and family members stating that you have the ability to take care of yourself and manage your money. However, be mindful that Social Security may interpret this improvement to mean that you are no longer sufficiently disabled to receive disability benefits.

Once the determination is made, you can propose your own representative payee. This person can be a family member, a friend, social service agency, nursing home, or other organization. Ideally, your representative payee should be someone who knows you well and sees you often. The proposed representative payee must be a person who has a means of support and no felony convictions. If do not have someone to be your representative payee, Social Security may ask you to choose one from an organization that employs representative payees.

Considerations for Your Representative Payee

The person you ask to be your representative payee should consider that responsibility carefully. Representative payees do not receive any fees. They can have out-of-pocket expenses reimbursed, such as stamps used to mail bills and mileage to doctor’s appointments. If a person agrees to be a representative payee, he or she must notify Social Security and appear for an interview at the Social Security office.

Once approved, the representative payee must open up a checking or savings account with the benefit payee having ownership interest in the account and the representative payee having fiduciary interest in the account. This means that the funds in the account belong to you, but are managed by your representative payee. A joint account cannot be used for this purpose because a joint account would enable both of you to access the money in the account and Social Security has determined that you should not be able to directly access or spend this money.

What if there is money left over?

Your representative payee is required to use your money to meet your immediate needs. Any money left over must be kept in an interest-bearing account to meet future needs. If you receive a “lump sum” payment, your representative payee can use that money to improve your living conditions. For example, the money can be used for items such as a security deposit on an apartment, a car to get to medical appointments, furniture, medical equipment not covered by insurance, reconstructive dental care, debt you may owe—as long as it is not owed to the representative payee. In that circumstance, the Social Security Administration must approve that repayment. If you receive SSI, the lump sum payment must be spent within nine months in order to avoid going over the resource limit (over $2,000 for an individual or $3,000 for a couple).

Other Responsibilities

A representative payee must keep timely and accurate records of the expenses paid on behalf of a benefit payee in order to make a yearly report to the Social Security Administration. These reports are monitored by the Social Security Administration and can be done using the appropriate SSA form and either mailed to the Administration or submitted online through their website.

If a benefit payee feels that the representative payee is not using his money properly, the benefit payee can call and inform the Social Security Administration. The Social Security Administration will investigate the report of misuse of funds and make a make a written decision of its finding of whether or not misuse of funds occurred. If misuse of funds occurred, the representative payee can be changed and the Social Security Administration will take action to recoup the misused money.

In addition to financial reporting required by the Social Security Administration, there are also non-financial reporting requirements. You need to tell your representative payee if you:

  • Get a job or stop working
  • Move
  • Get married
  • Receive money from another source
  • Go on a trip outside of the United States for 30 days or more
  • Go to jail for a crime that carries a sentence of more than one month
  • Are admitted to a hospital
  • Apply for help from another government or welfare office
  • Are no longer disabled.

The representative payee, in turn, must notify the Social Security Administration if any of these occur.

The representative payee must also notify the Social Security Administration if he or she does not wish to continue to be your representative payee. He must then return all benefits, including interest and cash on hand, to the Social Security Administration, which will pass that on to the new representative payee. If the benefit payee dies, any remaining benefits belong to the benefit payee’s estate and must be turned over to the administrator of the estate. Any monies received for the months after the month of death must be returned to the Social Security Administration.

What if I want a new representative payee?

If you decide to change representative payees, you must obtain an application form from the Social Security office and provide that form to the new representative payee who must complete the form and return to the Social Security office. Social Security will interview the new representative payee and, once approved, will send a notice that payments will be sent to the new representative payee.

This article appeared in the November 2014 issue of Looking Out for Your Legal Rights®.​​

12/9/2014