Hopefully, Baby Boomers are paying more attention to their power of attorney (POA) documents.

  • A financial power of attorney document allows an appointed person to make financial, legal and property decisions on another individual’s behalf.
  • A person given durable power of attorney for healthcare, or a medical POA, can make important and necessary healthcare decisions for an individual who is unable to communicate or participate in care.

A previous post pointed out that, as valuable as these POA documents are, they will not stand alone for Medicare. The same holds true for Social Security. POAs do not give the legal authority to negotiate and manage a beneficiary’s Social Security payments. This includes talking with Social Security about another person’s benefits.

Here’s a real-life example. Steve suffered a stroke (CVA). After hospitalization and rehabilitation, he returned home to the care of his wife. His major lingering effect was expressive aphasia, the inability to speak or write. A few months after discharge, his wife, Susan, decided to change banks. She called the Social Security Administration (SSA) to provide new account information for direct deposit of their monthly benefits. The agent would not update Steve’s account until SSA talked with him. But given his condition, that likely would not happen.

The agent introduced Susan to the Social Security representative payee. According to the SSA website:

  • SSA appoints a payee for anyone who can’t manage his or her Social Security benefits.
  • A representative payee can be a person or an organization.
  • The 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 needs.
  • The payee receives the Social Security payments and is given the authority to use them on the beneficiary’s behalf.
  • The payee must know what the beneficiary needs in order to make wise decisions.
  • A payee must also keep records of expenses.
  • In most cases, a payee is not paid for carrying out these duties.

Becoming a payee representative

The first step is to contact the local Social Security office to schedule an interview. In normal times, this would be a face-to-face appointment. However, Social Security has a policy for “ undue hardship,” which involves a telephone or video service delivery interview. Though there is no specific mention of COVID-19 in the policy, it sounds as though the current environment would meet the criteria; specifically, an in-person interview could cause undue hardship and the applicant is unable to visit the office during business hours.

The interview will determine the ability of the applicant to carry out the duties. The website explains the procedure . During the interview, the agent will complete the “Request to Be Selected as Payee.” Social Security will perform a thorough investigation and may also decide to conduct a home visit or financial record review.

Once appointed, the payee representative must keep records of expenses and may have to complete an annual Representative Payee Report to account for the benefit payments received. (There is also an online version of the form.) A recent change in procedure exempts some individuals, including spouses, from completion of this report.

Maybe plan ahead?

Others can learn from Steve and Susan’s experience. Social Security now allows advance designation of representative payees. A capable individual can appoint up to three trusted family members or friends who could serve as a representative payee in the future. If the need arises, Social Security can appoint one from the list to manage the individual’s benefits.

Add these important points to your to-do list.

  • Establish powers of attorney for financial and healthcare matters, if you haven’t done so already.
  • Designate the necessary Medicare representatives.
  • Learn more about a Social Security representative payee and consider advance designation.

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Robert A Anderson III, CLTC®, LUTCF®, ChFC®
Financial Planner
The Legacy Financial Group
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