The Social Security Advisory Board (SSAB) has released a study it commissioned on representative payees at Social Security. Rep payees handle money for beneficiaries who are unable to handle it for themselves. Most often a rep payee is a grown child or other close relative who handles the money responsibly but improper or illegal conduct by rep payees isn't as rare as anyone would like. The study is fine although its first recommendation, more studies, is part of the tradition of scholars making such self-serving recommendations when they do research for the federal government.
Unfortunately, there are three underlying problems with rep payees that no one seems to be able to do anything about:
- There are some claimants who don't have anyone close to them who is willing to be rep payee. If some stranger is going to have to do it and do it right, it's going to cost real money but taking more than a nominal sum out of the benefits will leave some claimants without enough money to live on.
- There are temptations for rep payees. Some will give in to the temptation and steal from the person whose money they're supposed to be handling. There's no way to completely prevent this. There's not even a clear path to reducing it. Detecting it after it happens is difficult.
- Overseeing rep payees is a difficult job. Even with adequate staffing at Social Security there will always be problems but Social Security lacks the manpower to do a lot of things, including effectively overseeing rep payees. That's because agency appropriations are too low, like, maybe, two billion dollars a year too low. One political party tries hard to keep the Social Security Administration underfunded for reasons that go well beyond rep payees.
It is a very complex problem with no easy solution. Even if SSA offered a stipend to an organization to handle it, things would be a mess. I see no easy fixes and no proposals that will make it any better than the broken system we have now.
ReplyDeleteI see 4 possible ways to improve it:
ReplyDelete1. Not sure if SSA already does this, but do random screening of representative payees to confirm funds are being properly accounted for.
2. Provide a subsidy to organization(s) that can act as representative payee when the claimant doesn't have a qualified family or friend.
3. Increase penalties for abuse of position as representative payee.
4. Increase education for representative payees. A lot of the fraud seems intentional, but I suspect some is due to ignorance.
None of these ideas are without cost, but at a minimum I imagine number 3 would be cheap.
Claimant: I need to Viki, i need $58 from my account.
ReplyDeleteOrganization: Viki is off today, I will send you to her supervisor, Mary.
Claimant: I need $58 from my acct.
Organization: What are you purchasing?
Claimant: Its my money I can spend it how I want.
Organization: we have guidlines we have to follow.
Claimant: Medications
Organization: OKay authorizes transfer
Claimant takes the $58 and buys a Black Widow action figure. Doesnt pay power bill or buy groceries.
Family of Claimant that is done with him gets mad that the organization is just giving the Claimant money, and hires a lawyer to sue the organization for not doing the job correctly.
Yeah, I see a lot of incentive to get into the Rep Payee business.....
I remember doing rep payee accountings in the office, pre-Regan years, and usually it was a close family member. Gawd, we were such a*holes to them; pretending we were the IRS and doing an audit. Moms with disabled adult children, children with a parent with dementia. All treated as if the huge sums they were handling were a thousand times as big. And record keeping were their only job. I get that there has to be accountability but in so many cases, these people were doing this as an act of love and treating them like they were likely thieves was just uncomfortable. For everyone.
ReplyDeleteI got assigned a payee fraud case in my SSA career. We somehow discovered that a disabled child was living in a group home in another state and the home state was paying for it with funds other than from SSA. Grandmother was payee. She didn't bother to report the residence address change nor the funds going to the group home (which were considered countable income for SSI). The overpayment was over $20K. She wrote a long explanation of what she did with the money and how she spent it. Some was spent on repairing damages to her house that he caused. She and I had multiple conversations about it. She had next to no evidence. All SSI paid to her for him was an overpayment, but then the liability issue had to be decided. I think I decided to split the difference and assess her with 50% liability and she owed some $10K.
ReplyDeleteFast forward to a few years later. I had retired and decided to work for a national income tax preparer. I heard her name come up in a conversation and racked my brain to figure out why it was familiar. Apparently she had never bothered to repay the misused funds and SSA had finally turned the case over to the IRS who imposed withholding of her tax refund which also meant no advance payment of the tax refund from the tax preparing company.
Of course, she had selective amnesia, and kept insisting that it had all been taken care of by SSA. I just kept my mouth shut. I knew different.
My mother was able to file for SSI benefits for me and be my payee from the start, I learned about much later!
ReplyDeleteKnowing how terrible the whole system is especially when the web based rep pye site was rolled out I suggested to someone who was going to be a caretaker that they just set up a joint account. Don't know if they did it or not. How many other pension/welfare systems have something like rep pye? POA is sufficient.
ReplyDelete