Representative Payee

• A representative payee is someone who manages someone else's supplemental security income. Representative payees are supposed to be advocates for the person drawing benefits and, as such, must act in the Social Security recipient's best interests. The supplemental security income must be spent first on the Social Security recipient's basic needs, and left over money has to be saved in an account owned by the person receiving Social Security benefits. The representative payee can be a family member or friend or an organization, such as a nursing home.
  
  

Income

• Representative payees are unable to draw a salary from the supplemental security income they manage. From the Social Security Administration's Guide to Representative Payees, "As a general rule, you many not take a fee from the beneficiary's funds for your services as a representative payee." According to the Social Security Administration, the supplemental security income must first be used for daily needs, then used for medical and dental care uncovered by insurance, and any remaining money must be saved.
  
  

Accounting

• To protect the Social Security recipient, the representative payee has to account for the money used. The Social Security Administration provides a worksheet to be filed yearly. It tracks the payment, how much was spent for daily living needs, how much was spent for medical care, and other expenses. The form depends on the honesty of the person filling it out, and a representative payee could take money as income and misreport it. However, the Social Security Administration does do audits.
  
  

Exceptions

• Some representative payees have taken income, legally, without punishment. One audit found a service that took $24 per month per Social Security recipient from 55 recipients. According to the report, the payments were "unauthorized fees" but "a small payment to the representative payee for business expenses was in the beneficiaries' best interests...." The organization organized appointments, social activities and transportation, and more, just as representative payees do, but fit further into what the Social Security Administration calls a fee-for-service provider. Fee-for-service providers are different from representative payees, and, as such, follow different responsibilities and accounting procedures.