Social Security Representative Payee Misuse

33 Pages Posted: 22 Apr 2013

Date Written: April 21, 2013

Abstract

This Article examines the problem of benefit misuse within the Social Security representative payee system, identifies shortcomings in the current legal framework for policing the payee’s conduct, and proposes legislative reform. The Social Security “representative payee” system serves an important function by protecting beneficiaries who have cognitive impairments and therefore cannot manage their own financial affairs. For beneficiaries living in an institutional setting, such as a nursing or group home, however, the appointment of the home or home administrator as representative payee creates conflicts of interest that adversely affect the beneficiary. Benefit misuse by representative payees in this setting tends to go undetected because the Social Security Administration lacks resources to perform universal audits and the cognitively compromised beneficiary is often incapable of detecting financial improprieties. To improve oversight of institutional representative payees such as nursing and group homes, this Article proposes that Congress create a “family representative” program wherein a concerned relative or friend would be authorized to monitor the payee without assuming the burdens and liabilities of a representative payee appointment. The family representative would be a person familiar with the beneficiary’s needs and circumstances and would receive a copy of all reports submitted by the representative payee to the Social Security Administration. The family representative’s access to information regarding the payee’s performance would facilitate greater detection and reporting of benefit misuse to the Social Security Administration than under the current system. The Article’s Appendix contains legislative language for a proposed statutory amendment to the Social Security Act that would implement the family representative program.

Keywords: Social Security, representative payee, family representative, fiduciary, benefit misuse, trust protector, nursing home, elder law

Suggested Citation

Weisbord, Reid K., Social Security Representative Payee Misuse (April 21, 2013). Penn State Law Review, Vol. 117, No. 4, 2013; Rutgers School of Law-Newark Research Paper No. 127. Available at SSRN: https://ssrn.com/abstract=2254684

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