From a recent report by Social Security's Office of Inspector General (OIG) (footnotes omitted):
A representative payee receives and disburses benefit payments o n a beneficiary’s behalf. Congress granted SSA [Social Security Administration] the authority to appoint representative payees for those beneficiaries whom SSA deems are incapable of managing or directing the management of their benefit payments because they have a mental or physical disability or are a child. A representative payee may be an individual or an organization. ...
SSA procedures prohibit volume individual representative payees from collecting a fee from SSA benefits except in certain circumstances, such as court-ordered fees, including fees for serving as a court-appointed legal guardian. ...
Since 2007 , we have conducted seven in - depth reviews of high-volume individual payees. All these payees had more than 50 beneficiaries in their care at the time of our r eview. In total, these payees served m ore than 1,000 beneficiaries. ...
Because of the extensive level of our review, we identified several recurring findings — including payees collecting unallowable and /or excessive fees. Specifically, we noted that all seven payees collected fees — many in excessive amounts — to compensate for their services, despite SSA policies to the contrary. Yet, of the 43 payees SSA reviewed with 50 or more beneficiaries, SSA only identified 4 as having collected fees. ...
We used the research tool LexisNexis to review the 47 high-volume individual payees. We noted that six payees had prior financial liens and judgments or bankruptcy filings. The mos t recent lien was filed in 2009 , which is the same year that the payee was selected by SSA. According to LexisNexis, this lien was released in 2011. ...
For example, one payee served only as the representative payee for one beneficiary whom the payee charged $1,592 for unallowable fees. In addition, for 34 of 80 beneficiaries, the payee collected extra fees totaling $49,423 above the allowed monthly guardianship fee of $60. This payee also collected large fees , totaling $113,526, from 2 of the 80 beneficiaries....
In September 2015, our Office of Investigations informed us that the Washington County Grand Jury had indicted 1 of the payees in the Seattle Region for 81 criminal counts including criminal mistreatment in the first degree, aggravated theft, and income tax evasion. This payee was included in our population of the 449 payees caring for between 15 and 49 beneficiaries. She had 45 beneficiaries in her care when the investigation was initiated in October 2014. According to available information, the representative payee filed for bankruptcy in 2001, and a Federal tax lien was filed in 2004 before she became a payee for SSA. Given the fiduciary responsibilities of a representative payee, it may be inappropriate to give those responsibilities to an individual who has claimed a personal bankruptcy and/or has a Federal tax lien.Before you criticize Social Security, remember that there aren't people lined up wanting to be representative payees. In many cases, it's hard to find any person or entity willing to do the job and, no, there really isn't an alternative to using rep payees. Some people just can't handle their own funds.
