In April 2020, the Social Security Administration announced that individuals are now able to designate “preferred individual(s) to serve as payee should the need arise.” This designation can be made online though the Administrations “my Social Security” website.
If you are not familiar with Social Security’s “representative payee” program, a ‘rep payee’ is a person or organization who receives social security or SSI benefits for a recipient who is unable to manage benefits on his or her own. Once the rep payee is chosen, benefit payments will be sent to that person. The benefits must be used for the benefit of the person unable to manage the funds and Social Security requires regular reporting on how the benefits are used.
Up to three persons may be designated as a potential representative payee. Contact information for each designation must also be provided.
It is important to note that while this new program permits Social Security to take into account the preference of the person receiving benefits, Social Security still has its own criteria for selective who may actually serve – considering things like the potential rep payee’s criminal record and the nature of his or her relationship to the person receiving benefits. Even so, this new program will allow beneficiaries to have a greater input into management of their affairs, in a way not possible before. It also makes advance designation of a potential representative payee another component of a solid estate plan.