Compliance Question of the Week

What is a Social Security Representative Payee Account and how do I set one up?

The Social Security Administration (SSA) appoints a “representative payee” for a recipient of social security funds who is not qualified to handle the funds on his or her own. For example, a minor, the aged who are not mentally competent, or some institutionalized persons would be candidates for a representative payee. More information about the rules that govern representative payees can be found on the Social Security Administration website, www.ssa.gov.

There are two different, but similar programs offered by the SSA. The first program is called the Social Security Representative Payee Program. The second is called the Supplemental Security (SSI) Representative Payee Program. In either program there are three common rules that apply when creating an account. First, the beneficiary must own the account. Second, the beneficiary cannot have access to the account. Third, the beneficiary’s TIN must be used on the account.

In order to set up one of these accounts, the account should be titled: “Beneficiary’s Name by Payee Name, Representative Payee.” A credit union could either provide for the type of account in its agreement, or use a trust account format or agency account format. The signature card should be signed: “Payee name, Representative Payee for Beneficiary’s Name.” Since it is the beneficiary’s account, the beneficiary could qualify for membership or if the payee was qualified for membership, the payee could open the account for the beneficiary.

 

Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org.

Posted in Compliance.