Representative Payment Policies Regulation

§ 416.610

20 CFR Ch. III (4–1–06 Edition)

(b) Policy used to determine whether to
make representative payment. (1) Our policy is that every beneficiary has the
right to manage his or her own benefits. However, some beneficiaries due
to a mental or physical condition or
due to their youth may be unable to do
so. Under these circumstances, we may
determine that the interests of the
beneficiary would be better served if
we certified benefit payments to another person as a representative payee.
However, we must select a representative payee for an individual who is eligible for benefits solely on the basis of
disability if drug addiction or alcoholism is a contributing factor material to the determination of disability.
(2) If we determine that representative payment is in the interest of a
beneficiary, we will appoint a representative payee. We may appoint a
representative payee even if the beneficiary is a legally competent individual. If the beneficiary is a legally
incompetent individual, we may appoint the legal guardian or some other
person as a representative payee.
(3) If payment is being made directly
to a beneficiary and a question arises
concerning his or her ability to manage
or direct the management of benefit
payments, we will, if the beneficiary is
18 years old or older and has not been
adjudged legally incompetent, continue
to pay the beneficiary until we make a
determination about his or her ability
to manage or direct the management of
benefit payments and the selection of a
representative payee.
[47 FR 30475, July 14, 1982, as amended at 60
FR 8150, Feb. 10, 1995]

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§ 416.610 When payment will be made
to a representative payee.
(a) We pay benefits to a representative payee on behalf of a beneficiary 18
years old or older when it appears to us
that this method of payment will be in
the interest of the beneficiary. We do
this if we have information that the
beneficiary is—
(1) Legally incompetent or mentally
incapable of managing benefit payments; or
(2) Physically incapable of managing
or directing the management of his or
her benefit payments; or

(3) Eligible for benefits solely on the
basis of disability and drug addiction
or alcoholism is a contributing factor
material to the determination of disability.
(b) Generally, if a beneficiary is
under age 18, we will pay benefits to a
representative payee. However, in certain situations, we will make direct
payments to a beneficiary under age 18
who shows the ability to manage the
benefits. For example, we make direct
payment to a beneficiary under age 18
if the beneficiary is—
(1) A parent and files for himself or
herself and/or his or her child and he or
she has experience in handling his or
her own finances; or
(2) Capable of using the benefits to
provide for his or her current needs and
no qualified payee is available; or
(3) Within 7 months of attaining age
18 and is initially filing an application
for benefits.
[47 FR 30475, July 14, 1982, as amended at 54
FR 35483, Aug. 28, 1989; 60 FR 8150, Feb. 10,
1995]

§ 416.611 What happens to your monthly benefits while we are finding a
suitable representative payee for
you?
(a) We may pay you directly. We will
pay current monthly benefits directly
to you while finding a suitable representative payee unless we determine
that paying you directly would cause
substantial harm to you. We determine
substantial harm as follows:
(1) If you are receiving disability payments and we have determined that
you have a drug addiction or alcoholism condition, or you are legally incompetent, or you are under age 15, we
will presume that substantial harm exists. However, we will allow you to
rebut this presumption by presenting
evidence that direct payment would
not cause you substantial harm.
(2) If you do not fit any of these categories, we make findings of substantial harm on a case-by-case basis. We
consider all matters that may affect
your ability to manage your benefits in
your own best interest. We decide that
substantial harm exists if both of the
following conditions exist:

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Social Security Administration

§ 416.620

(i) Directly receiving benefits can be
expected to cause you serious physical
or mental injury.
(ii) The possible effect of the injury
would outweigh the effect of having no
income to meet your basic needs.
(b) We may delay or suspend your payments. If we find that direct payment
will cause substantial harm to you, we
may delay (in the case of initial eligibility for benefits) or suspend (in the
case of existing eligibility for benefits)
payments for as long as one month
while we try to find a suitable representative payee. If we do not find a
payee within one month, we will pay
you directly. If you are receiving disability payments and we have determined that you have a drug addiction
or alcoholism condition, or you are legally incompetent, or you are under
age 15, we will withhold payment until
a representative payee is appointed
even if it takes longer than one month.
We will, however, as noted in paragraph (a)(1) of this section, allow you
to present evidence to rebut the presumption that direct payment would
cause you substantial harm. See
§ 416.601(b)(3) for our policy on suspending the benefits if you are currently receiving benefits directly.

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Example 1: Substantial Harm Exists. We are
unable to find a representative payee for Mr.
X, a 67 year old claimant receiving title XVI
benefits based on age who is an alcoholic.
Based on contacts with the doctor and beneficiary, we determine that Mr. X was hospitalized recently for his drinking. Paying
him directly will cause serious injury, so we
may delay payment for as long as one month
based on substantial harm while we locate a
suitable representative payee.
Example 2: Substantial Harm Does Not Exist.
We approve a claim for Mr. Y, a title XVI
claimant who suffers from a combination of
mental impairments but who is not legally
incompetent. We determine that Mr. Y needs
assistance in managing benefits, but we have
not found a representative payee. Although
we believe that Mr. Y may not use the
money wisely, there is no indication that receiving funds directly would cause him substantial harm (i.e., serious physical or mental injury). We must pay current benefits directly to Mr. Y while we locate a suitable
representative payee.

(c) How we pay delayed or suspended
benefits. Payment of benefits, which
were delayed or suspended pending appointment of a representative payee,

can be made to you or your representative payee as a single sum or in installments when we determine that installments are in your best interest.
[69 FR 60236, Oct. 7, 2004]

§ 416.615 Information considered in
determining whether to make representative payment.
In determining whether to make representative payment we consider the
following information:
(a) Court determinations. If we learn
that a beneficiary has been found to be
legally incompetent, a certified copy of
the court’s determination will be the
basis of our determination to make
representative payment.
(b) Medical evidence. When available,
we will use medical evidence to determine if a beneficiary is capable of managing or directing the management of
benefit payments. For example, a
statement by a physician or other medical professional based upon his or her
recent examination of the beneficiary
and his or her knowledge of the beneficiary’s present condition will be used
in our determination, if it includes information concerning the nature of the
beneficiary’s illness, the beneficiary’s
chances for recovery and the opinion of
the physician or other medical professional as to whether the beneficiary is
able to manage or direct the management of benefit payments.
(c) Other evidence. We will also consider any statements of relatives,
friends and other people in a position
to know and observe the beneficiary,
which contain information helpful to
us in deciding whether the beneficiary
is able to manage or direct the management of benefit payments.
§ 416.620 Information considered in selecting a representative payee.
In selecting a payee we try to select
the person, agency, organization or institution that will best serve the interest of the beneficiary. In making our
selection we consider—
(a) The relationship of the person to
the beneficiary;
(b) The amount of interest that the
person shows in the beneficiary;
(c) Any legal authority the person,
agency, organization or institution has
to act on behalf of the beneficiary;

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