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6
Updated June 4, 2025
Social Security: Representative Payees and Power of Attorney
Old-Age, Survivors, and Disability Insurance (i.e., 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, Department of the Treasury 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 health
powers of attorney, while about 9% with dementia and 2%
with mild cognitive impairment had been assigned payees.
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 of Attorney
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.
Representative Payees
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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