OASDI Beneficiaries and SSI Recipients with Representative Payees (1995)

Most persons under the Old-Age, Survivors, and Disability Insurance (OASDI) program or the Supplemental Security Income (SSI) program receive the checks in their own name and make their own decisions as to the of the funds. However, there has always been a portion of the beneficiary population who, for a variety of reasons, are not able to manage their benefits alone. To protect the interests of these persons, the Social Security Act provides for the appointment of a representative payee. Section 205(j)(1) and section 1631(a)(2)(A) of the Act provide broad authority for the Social Security Administration (SSA) to determine whether an individual beneficiary should have a representative payee, and, if so, who the payee should be. In addition, SSA has been given the responsibility to monitor the of payments by these payees. This note gives an overview of the representative payee program, including a program description and brief history, a snapshot of some characteristics of the population receiving Social Security benefits and SSI payments through a representative payee, recent trends in the number of persons with payees receiving such benefits or payments, and legislative and policy responses to these trends. The data in this note, with the exception of table 6, come from December 1994 sample extracts of the Master Beneficiary Record (MBR) and the Supplemental Security Record (SSR), the main administrative files for the OASDI and SSI programs, respectively. (table 6 omitted) Standard errors for estimated counts and percentages are shown in the Technical Note on page 123. Background Since monthly payments under the Social Security program first began, the law has recognized there would be some beneficiaries unable to manage their Social Security benefits in their own best interests. Section 205(j)(1) of the Act provides for the appointment of a representative payee if it is determined that the interest of the individual under this title would be served thereby... regardless of the legal competency or incompetency of the individual.(1) As noted previously, SSA is responsible for determining the need for a payee. SSA almost always decides to appoint a payee for certain definable groups, such as children under the age of 18, those persons a court has judged incapable of handling their own affairs, and those whose mental or physical incapacity prevents them from acting on their own behalf. In addition, since the SSI program began in 1974, a payee has been required for SSI recipients whose disability is based on a diagnosis of drug addiction and/or alcoholism (DA&A). Beginning March 1, 1995, those OASDI beneficiaries for whom DA&A is material to the finding of disability must receive their payments through a representative payee (P.L. 103-296). Once the need for a payee has been determined, SSA identifies persons who are both able and willing to serve in this capacity. Whenever possible, the preferred payee is a family member or friend who has shown interest in the well-being of the beneficiary. Alternatives to preferred payees include medical or other custodial institutions, and financial, social, or religious organizations. An individual who serves as representative payee undertakes certain obligations, both to the beneficiary and to SSA. The payee must manage OASDI benefits and/or SSI payments for the use and benefit of the person for whom the benefits are intended and conserve any funds are not needed for ongoing expenses. In addition, the payee must account to SSA annually for the amount of benefits received and report to SSA any change of circumstances could affect eligibility for, or amount of, benefits. Characteristics of the Population In December 1994, approximately 46.7 million persons received a payment from the OASDI program, the SSI program, or from both programs. Of this total, about 6.1 million beneficiaries (13. …