Social Security Fraud Complaints:
Payee Fraud

Representative Payee Misuse

Sometimes, people who receive Social Security benefits are not able to handle their own financial affairs. In those cases, and after careful investigation, Social Security appoints a relative, friend or another interested party to handle their Social Security matters. That person is called a Representative Payee. Having power of attorney over someone does not automatically qualify that person to be a Representative Payee. A Representative Payee can also be an organization, such as a nursing home.

Representative Payees are required by law to use benefits properly. Benefits should first be used for the beneficiary’s day-to-day needs of food and shelter. Then, benefits may be used for the beneficiary’s personal needs, such as clothing, recreation, and other expenses. Benefits can also be used to pay for medical needs or for care in a residential institution.When reporting allegations of Representative Payee misuse, there are several things that must be considered before reporting this information. A Representative Payee has many responsibilities.

Responsibilities of a Representative Payee

Some of the duties of a Representative Payee are as follows:

• Determine the beneficiary’s total needs and to use the benefits received in the best interests of the beneficiary.
• Maintain a continuing awareness of the beneficiary’s needs and condition, if the beneficiary does not live with the Representative Payee, by contact such as visiting the beneficiary and consultations with custodians.
• Apply the benefit payments only for the beneficiary’s use and benefit.
• Notify SSA of any change in his or her circumstances that would affect performance of the payee responsibilities.
• Report to SSA any event that will affect the amount of benefits the beneficiary receives and to give SSA written reports accounting for the use of the benefits.

Essential Needs

A Representative Payee must apply the payments for the use and benefit of the entitled individual. The funds should be spent on the beneficiary’s current and reasonably foreseeable needs. The needs should be immediate and essential.

Examples of properly disbursed benefits are:
Food
Dental Care
Clothing
Personal Hygiene
Shelter
Education
Utilities
Rehabilitation Expenses
Medical Care and Insurance
 
If there are funds left over once the beneficiary’s current needs are met, the representative payee must save and/or invest the remaining funds in trust for the beneficiary.

Prohibited actions of a Representative Payee

Representative Payees cannot:

• Use a beneficiary’s funds for the Representative Payee’s personal expenses, or spend funds in a way that would leave the beneficiary without necessary items or services (housing, food and medical care).
• Put a beneficiary’s Social Security or SSI funds in the Representative Payee’s on another person`s account.
• Keep conserved funds once they are no longer a Representative Payee for the beneficiary.
• Charge the beneficiary for services unless authorized by the Social Security Administration to do so.

Reporting Potential Violations

Based on the above information, if you feel the Representative Payee has in some fashion misused the benefits being issued for the beneficiary, contact the Social Security Administration, Office of the Inspector General Fraud Hotline (see below). You should provide as much identifying information as possible regarding the suspect. Such information should include:

• Name of the Representative Payee and the beneficiary, if known,
• Social Security Number of the Representative Payee and the beneficiary, if known,
• Date of birth of the Representative Payee and the beneficiary,
• Details regarding the allegation, such as when it happen, how the abuse was committed, and where the abuse took place.

Your information is important, however, without sufficient facts it is unlikely that we will be able to provide assistance.

Social Security Administration
Office of the Inspector General Fraud Hotline

Contact Information:
Internet: http://socialsecurity.gov/oig/public_fraud_reporting/index.htm  - scroll down to the bottom of the page and use the drop down menu to select payee fraud abuse and you will be redirected to the complaint form
U.S. Mail:
Social Security Fraud Hotline
P.O. Box 17768
Baltimore, Maryland 21235
Fax: 410-597-0118
Telephone: 1-800-269-0271 from 10:00 a.m. to 4:00 p.m. Eastern Standard Time
TTY: 1-866-501-2101 for the deaf or hard of hearing.

Source: http://socialsecurity.gov/oig/hotline/repayee.htm, and http://socialsecurity.gov/oig/public_fraud_reporting/index.htm
Accessed on: March 1, 2007