Rep Payee Conserved Funds Transfers Proposed

November 16, 2009

Author: Catherine M. Callery (Kate)| Louise M. Tarantino

In an October 14, 2009 announcement, SSA is proposing a slight change to its rules for representative payees who are discontinuing their service as representative payees. 74 Fed. Reg. 52706. Comments deadline is December 14, 2009.

Prior to the proposed changes, a rep payee would either return the beneficiary’s/recipient’s funds in his/her hands to SSA for redistribution, or to the new rep payee, if there is one. Under the current regulations, 20 C.F.R. §§404.2060 & 416.660, the transferee is SSA's choice:  “A representative payee who has conserved or invested benefit payments shall transfer these funds, and the interest earned from the invested funds, to either a successor payee or to us, as we will specify. If the funds and the earned interest are returned to us, we will recertify them to a successor representative payee or to the beneficiary.”

The proposed change:  the payee may be permitted to pay the funds directly to the beneficiary/recipient, but still, at SSA’s direction and choice of transferee.

Note, also, that current policy differs from the current regulation. “A representative payee who has conserved or invested funds for a beneficiary, but is no longer serving as payee for the beneficiary, must return the funds to SSA for reissuance to either the successor payee or to the beneficiary in direct payment.” POMS § GN 00603.055.

The new language proposed is:  “A representative payee who has conserved or invested benefit payments shall transfer these funds, and the interest earned from the invested funds, to either a successor payee, to the beneficiary, or to us, as we will specify. If the funds and the earned interest are returned to us, we will recertify them to a successor representative payee or to the beneficiary.”

SSA says this will be beneficial for many beneficiaries, as they may need funds right away to pay for rent or the like when they get out of foster care, and eliminating the step of returning funds to SSA only to be paid out to the beneficiary again will make the transfer quicker.