Using a non-profit organization as Representative Payee to prevent fraud.
Find a legitimate Representative Payee that has been approved by the Social Security Administration. A number of non-profit organizations as well as charities provide this service for senior citizens, people with a disability, and others who struggle to manage their finances. An approved non-profit Representative Payee is a great option for eliminating fraud or financial abuse; learn more below and find a free or low cost Representative Payee. Note all these agencies are screened by the Social Security Administration and go through a stringent approval process.
More than 70 million people receive Social Security (SS) benefits as either a monthly payment based on work history or as Supplemental Security Income (SSI) or even disability (SSD). The cash assistance is paid to elderly, blind or disabled individuals who have limited resources or income. In most cases, benefits are paid directly to the person who has earned or qualifies for the payment.
What is a Representative Payee?
For persons unable to manage their personal financial affairs, the Social Security Administration (SSA) operates a Representative Payee Program. Many non-profits, which are approved/screened by the government, offer this service as well. In fact, a charity or non-profit is often a safer option to prevent financial fraud. A representative payee (RP) is a person, institution or organization approved and appointed by the SSA to receive and manage Social Security or SSI payments on behalf of the beneficiary, the person entitled to the benefit.
Simply because a relative or friend may have a power of attorney or be listed as a co-owner on a bank account does not automatically make that person a representative payee. Those designations do not provide legal authority to receive and manage SS/SSI payments on behalf of the beneficiary. The SSA must specifically approve and appoint a person or organization to act as the payee.
Approximately 8 to 10% of SS/SSI recipients (either seniors or the disabled) currently have representative payees. This group includes minor children, severely disabled adults and seniors who cannot manage their affairs due to dementia or another condition.
SSA typically looks for a relative or close friend of the beneficiary to serve as a representative payee. However, when a suitable individual is not available, SSA will look for a qualified organization to serve as the payee. Hundreds of non-profit organizations throughout the U.S. provide representative payee services. In fact, using a non-profit may be safer and in fact reduce theft or fraud, as sadly too many elderly people can have their finances mismanaged (or their money stolen) by a family member and/or friend.
Representative Payee Duties
The goal of the Representative Payee Program is to protect SS/SSI recipients from fraud, victimization or financial abuse and to help ensure payments are used to provide for the beneficiary's needs such as housing, utilities, food, clothing, education, recreation and medical or dental care. Funds that are not spent from benefit payments must be kept in a bank account for the beneficiary's future needs.
The payee must keep records of payments received and how the funds are spent or saved and provide that information to the SSA whenever requested. A non-profit will often have controls as well as checks and balances in place to ensure the data is accurate. The bank account into which benefit payments are deposited must be owned by the beneficiary with the payee listed as a financial agent.
The payee must also report any changes in the beneficiary's status that might affect benefit payments. For example, if the beneficiary is hospitalized, moves, starts or stops working or loses other benefits, the representative payee must notify the SSA.
Payees may be held personally liable for the overpayment of benefits. Again, this is another good reason to use a non-profit as they have much more to lose and at risk if they commit fraud. Under federal law, a payee may also face fines and imprisonment for misusing SS/SSI benefits.
Organizational Representative Payees
When an individual is unavailable to serve as the payee, of if the Social Security beneficiary does not have anyone in their life who can help them. a non-profit organization may assume the role. There are many legitimate options out there, as noted below. The responsibilities of an organizational representative payee are similar to those of an individual payee with an added requirement that organizational payees must file annual reports.
Non-profit organizations that act as representative payees exist in every state. For example, Tsunami Enterprises is in Northern California. Corporation of Guardianship (CoG) is a legitimate non-profit in North Carolina. Mississippi United to End Homelessness (MUTEH) provides representative payee services and works closely with clients to establish monthly budgets. Idaho's One Love Agency is authorized by the SSA to provide payee services. Many non-profit Community Action agencies serve as representative payees as well.
Northwest Washington Payee Service (NWWPS) offers payee services in two Washington State counties. Older and/or disabled people in Los Angeles can turn to St. Barnabas Senior Service. Easterseals Washington has been serving people with disabilities for more than 70 years and provides payee services along with financial advocacy, education and other support services.
Non-profit organizations are thoroughly screened before the SSA grants approval for them to act as representative payees. This a huge positive to using one as it all but eliminated the chances of financial fraud. When an organization applies to act as a payee, the SSA will determine the relationship of the organization to the beneficiary, examine the organization's qualifications and assess its ability to carry out payee responsibilities.
How to find a legitimate non-profit representative payees
There are a few great ways to locate an SSA-approved payee service.
- One is through an Area Agency on Aging (AAA). These are public or private non-profit agencies designated by each state to address the needs of the senior as well as disabled community at regional and local levels. AAAs typically coordinate and offer a variety of services to older adults. All of the Agency on Aging locations are screened, approved, and found to be legitimate by the SSA (Social Security Administration).
Area Agencies on Aging were established across the country in 1973 following an amendment to the federal Older Americans Act. Operation costs are usually provided by both federal and state governments. Today, more than 620 non-profit organizations comprise the AAA network to serve persons aged 60 and older.
Most AAAs serve a defined geographical area such as a city, county or multi-county district. The local program may use the term "Area Agency on Aging" in its title or it may go by a different name such as "Aging and Disability Services" which is an AAA that serves Seattle and King County, Washington. Learn more on, and find, Aging on Agency offices near you.
- Another is a local community action agency. These are local private and public/government funded agencies. A number of assistance programs may be offered by a community action agency near you, including many serve as Representative Payees. They also offer financial help, grants, budgeting or financial literacy programs and more. More on non-profit community action agency programs.
- Last but not least is the United Way Representative Payee referral programs. The United Way is a national non-profit with toll free referral numbers, partnerships, databases and other tools that can help caregivers, people on disability or SSI, the retired and others. More on assistance from the United Way.
Although not required, the SSA encourages individual and non-profit organizational payees to take an active role in the beneficiary's life beyond simply managing financial affairs. This might include helping the beneficiary establish a budget and involving the beneficiary in financial decisions to the extent possible. A payee might help the beneficiary obtain medical care, fill out applications and tax returns or locate other needed services such as food and housing assistance.
Organizational payees are often able to provide this assistance to older beneficiaries to a greater degree than individual payees. Each AAA provides a different array of services to support the senior population. These may include nutrition programs, caregiver support, information about and referral to community assistance programs, insurance counseling, in-home care assessments and representative payee services.
Unlike individual payees, a community-based, non-profit organizational payee may collect a fee for providing payee services. Payment must be approved in advance by the SSA which also sets the payment amount. Currently, the fee that may be collected is either 10% of the beneficiary's monthly payment or $48, whichever is less.
For many older Americans, Social Security provides their major or only source of income. Seniors are also common targets of fraudulent schemes designed to separate them from their often-limited resources. When a vulnerable senior who receives Social Security begins losing the ability to manage or make wise decisions about financial matters, seeking the assistance and protection of a representative payee may be required.
Choosing a trusted family member or friend may solve the problem for some seniors. For those lacking such a person, choosing an established, non-profit organization with substantial experience acting as a representative payee can provide the best solution to help manage a beneficiary's financial affairs. A non-profit can help them avoid scams, frauds, and theft will ensuring that their basic needs are met.