Social Security Benefits Payee Representative

Marie Rolling-Tarbox
Marie R. Tarbox, JD Vice President & Trust Officer

As you may recall, with a power of attorney for finances, you name who you want to manage your financial affairs if you are unable to do so. Interestingly, the social security administration (“SSA”) does not accept powers of attorney. It has its own process for identifying who will receive and manage the social security benefits of the legally incompetent.

The SSA refers to someone who receives payments as a beneficiary. If a beneficiary is under the age of 18, is legally incompetent, or if the SSA determines a beneficiary is incapable of managing or directing the management of their benefits, it requires the beneficiary to have a Payee Representative (PR). The PR is then the person who receives the beneficiary’s payments, and who must file an annual report with the SSA about how the benefits were used. 

Historically, a PR was a person, agency, organization or institution selected by the SSA to manage the beneficiary’s benefits. The SSA vetted an individual who was came forward as a relative, friend or other interested party to serve as the PR. This was sometimes frustrating to an attorney-in-fact or agent properly acting under a beneficiary’s general durable power of attorney, especially when the named agent was not selected as the PR. 

In 2018 Congress passed a law which made changes to the Social Security Act, which included assessments to improve and strengthen the PR program. As the result of that law, and following the required assessments, the SSA now permits a beneficiary to designate who they want as their PR, if one becomes necessary. The designation process is referred to by the SSA as an Advanced Designation. You can even designate alternate PRs, just as you can name an alternate agent under your power of attorney. 

You may want to consider naming as your PR the same person you’ve named as your agent under your power of attorney, with your preferred alternates. If circumstances change, you may change your designated PR. You can complete your Advanced Designation online through your ‘my Social Security account’ (http://www.ssa.gov/myaccount), by telephone (1-800-772-1213), by going to the local SSA office (appointments necessary) or via mail using Form SSA-4547. Your agent acting under your power of attorney cannot complete an Advanced Designation on your behalf. The right to designate a PR is personal to you, and must be done by you. 

If and when the time comes for a PR, the SSA will still vet your designated PR. However, being able to designate your preferred PR to manage your social security benefits is far more similar to naming an agent under your power of attorney than the prior process, when the SSA selected your PR without input from you as a beneficiary. Using an Advanced Designation to designate your PR is another implement in your estate planning toolkit.

Contact Marie: 563.388.2631