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1 1 (May 9, 2024)

handle is hein.crs/govepbp0001 and id is 1 raw text is: Congressional Research Service Informing the Iegisl9tive debate since 1914 0 May 9, 2024 Social Security: Representative Payees and Power of Attorney Social Security beneficiaries and Supplemental Security Income (SSI) recipients (referred to herein as beneficiaries for both programs) may require additional help managing their finances and may grant power of attorney to family, friends, or professionals to act on their behalf. One common question is why individuals with power of attorney are not recognized by the Social Security Administration (SSA) as having authority to receive and manage beneficiaries' Social Security or SSI payments. Briefly, Treasury Department regulations do not recognize general powers of attorney for negotiating recurring federal benefit payments, including Social Security and SSI payments. Instead, SSA appoints representative payees (payees) to receive and manage program payments for beneficiaries whom the agency deems incapable of managing their own benefits. For some populations, granting power of attorney is more common than appointing a representative payee. A 2016 study found that approximately 63% of retirees age 70 or older with dementia or mild cognitive impairment had granted a health power of attorney, while about 9% with dementia and 2% with mild cognitive impairment had been assigned a payee. This In Focus provides an overview of power of attorney and the underlying Treasury regulations regarding the use of power of attorney to negotiate Social Security and SSI payments. It also describes SSA's payee designation and highlights the agency's responsibilities for making beneficiary capability determinations, appointing payees, and monitoring payees to ensure proper use of beneficiary funds. Power ofAttorney Power of attorney is a legal instrument that grants a third party the authority to make certain decisions on an individual's behalf, such as decisions about finances or medical care. SSA explains, however, that power of attorney does not lessen the rights of the individual and does not usually grant the third-party the right to manage the individual's assets. Treasury does not recognize power of attorney for negotiating recurring benefit payments, including those from Social Security or SSI. The Social Security Act also generally prohibits the transfer of control of Social Security or SSI payments to individuals other than beneficiaries or their SSA-appointed payees. This means that an individual with power of attorney for someone else does not have the authority to manage that person's Social Security or SSI payments unless SSA has also made the individual with power of attorney the beneficiary's payee. Treasury Regulations SSA's policy guidance cites Title 31, Section 240.17, of the Code of Federal Regulations as the rationale for not recognizing power of attorney. Paragraph (c) speaks to the need for a special power of attorney to manage recurring benefit payments, which would include Social Security and SSI payments: Checks issued for classes of payments other than those specified in paragraph (b) of this section, such as a recurring benefit payment, may be negotiated under a special power of attorney executed in accordance with applicable State or Federal law, which describes the purpose for which the checks are issued, names a person as attorney- in-fact, and recites that the special power of attorney is not given to carry into effect an assignment of the right to receive such payment, either to the attorney- in-fact or to any other person (emphasis added). Treasury explains part of the rationale behind the mandatory use of special powers of attorney in the final rule on Indorsement and Payment of Checks Drawn on the United States Treasury posted in the Federal Register on April 1, 2004: This final rule retains the general provision that general powers of attorney may be used only to negotiate certain enumerated checks, the right to which does not expire upon the death of the payee/beneficiary. For all other checks, such as recurring benefit payments, a special power of attorney is required.... The reason for this decision is two-fold: first, a general power of attorney is more easily abused by the attorney-in-fact; and second, a special power of attorney must explicitly state that it does not purport to assign the right to receive payments to the attorney-in-fact or to any other person. Requiring use of a special power of attorney for payments such as recurring benefit payments ensures both that the intended recipient has a clear intent to authorize an attorney-in-fact to negotiate such payments, and that all parties seeking to rely on the power of attorney are aware that it cannot be used as a means of assigning the right to receive payment. epresentative Payee5 A payee is a person or organization that SSA appoints to receive and manage Social Security or SSI benefits on behalf of an individual whom the agency deems incapable of doing so. A payee's main duties are to use the benefits to pay for the current and future needs of the beneficiary and properly save any benefits not needed to meet current

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