Many people know it is important to have a financial power of attorney so someone else can manage your finances when you are not able. What many people don’t know is that the Social Security Administration doesn’t recognize traditional powers of attorney.
An additional step must be taken to appoint the person who will manage your Social Security benefits when help is needed.
To ensure a person of your choice can manage your Social Security benefits, contact the SSA and make an advance designation of a representative payee.
Created under a 2018 law, this rule allows a person to choose one or more individuals to manage the person’s Social Security benefits. The SSA then is required to work with the named individual or individuals in most cases.
You can name up to three people as advance designees and rank them in order of priority. If the first one isn’t available or is unable to perform the role, the SSA will move to the next person on the list.
Someone who already is receiving Social Security benefits may name an advance designee at any time. Someone claiming benefits for the first time can name the designee during the claiming process.
The designee may be named using your “my Social Security” account on the Social Security web site or by contacting the SSA via telephone (800-772-1213) or at the local field office. Because of budget and staff reductions at SSA, it’s best to use the online tool.
Designees also can be named through the mail by using Form SSA-4547 – Advance Designation of Representative Payee.
You can change the designees at any time.
The SSA doesn’t automatically follow your designations. SSA first will evaluate a designee and determine the person’s suitability to act on your behalf. Once accepted, a designee becomes the representative payee for your benefits. The payee receives the benefits on your behalf and is required to use the money to pay for your current needs.
Representative payees generally are individuals, but a representative payee also can be a social service agency, nursing home, or one of several other organizations recognized by the SSA to serve as payees.
If you don’t name someone, the SSA will name a representative payee on your behalf if it decides you need help managing money. Relatives or friends can apply to be a representative payee, or the SSA can choose someone. Sometimes a court will appoint a legal guardian.
Representative payees generally can’t charge fees or their services unless they receive authorization from SSA or are court-appointed legal guardians authorized to charge fees.
Once someone is approved as a designated payee, the individual must file an annual report with SSA detailing how the benefits were spent. Receipts and records must be retained in case a state agency asks to review how the funds were spent. The SSA has a booklet explaining the duties and responsibilities of a representative payee.
Being a designated representative doesn’t confer on the person any legal authority or power over any other aspect of your finances or personal life.
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