Social Security Beneficiaries

Posted on October 28, 2010


Phillip is a BENEFICIARY of Social Security payments. Phillip, who suffers from slight dementia, cannot handle his own financial affairs, so his nephew, Stephen, is Phillip’s REPRESENTATIVE PAYEE. Stephen has been appointed by the Social Security Administration. Stephen pays Phillip’s mortgage and his other bills, and also pays for Phillip’s Home Health Care nurse.

When Stephen discovered his uncle was incompetent to handle his own affairs, Stephen contacted the Social Security Administration in their town. Stephen submitted an application, the SSA-11-BK, a request to be selected as payee. Stephen also had to prove he was a family member or a concerned friend, and had an interview with a SSA employee.

Although Stephen did not have to get a Power of Attorney, sometimes that is required when a third party is granted the authority to transact certain businesses for that other person. A Power of Attorney also can be used for a non-geriatric or incompetent person.

Stephen’s college friend, Rachel, went with the Peace Corps to Botswana, and as it was difficult to contact her there as she would be gone for three years, she asked Stephen to be her power of attorney, but Stephen was too busy with looking after his uncle, Phillip.

Stephen puts Phillip’s Social Security money, along with his pension from working 30 years at the gas company in an account. After Stephen has paid his uncle’s bills, he saves money left over in the account and tries to budget it for what may happen in Phillip’s life down the line.

Stephen keeps scrupulous records of all Phillip’s received monies, and how they are disbursed or saved. When Phillip must go to the doctor, Stephen or another representative accompanies him, and sees to those needs (and they go to the movies now and then, both being Woody Allen fans)

Sometimes, when taking Phillip to the doctor, Stephen must pay for a cab, or some other out-of-pocket expense, and so he takes that money from Phillip’s account, but saves a receipt as explanation.

Stephen learned that although he does not charge his uncle for his payee services, sometimes non-profit social service organizations, or elder law lawyers can do so, as managing another person’s money, and their life, can be quite time-consuming.

Although Stephen is Phillip’s payee, he is not legally authorized (because he has no Power of Attorney) to sign legal documents for Phillip, other than Social Security papers, and of course he cannot keep saved money after Phillip’s death, or if someone else becomes payee.

Eventually, Phillip may become so incapacitated that he must go into a nursing facility. Stephen’s duty then is to report this to the Social Security Administration.

While Phillip is in the facility, Stephen must provide a certain amount of Phillip’s benefits for the facility’s expenses in caring for Phillip.

Phillip’s Social Security income is derived from Social Security taxes from work that Phillip has done. But, Phillip and Stephen have another relative , Trent, who has been disabled all his life and is unable to work.

Trent receives SUPPLEMENTAL SECURITY INCOME which differs from Social Security in that when Trent’s mother applied for the SSI, Trent had of course not made much money to be taxed by Social Security.

Trent’s mother had to prove that Trent was indigent. Legally, Trent cannot have more than two thousand dollars in cash and property, other than a house and car.
When Trent’s mother applied for SSI, there was a waiting period while the courts and doctors debated Trent’s eligibility.

Trent was turned down twice before finally being deemed eligible, and the way SSI works is, once you are accepted, you receive benefits from the first time you applied. Trent’s mother received a check for nine thousand dollars, as Trent’s monthly check is $500 a month, plus Medicaid.

The nine thousand dollars of course was more than the two thousand that a beneficiary must have.  There are two ways to handle this. You can spend the money within nine months without being docked by future payments, or there is the possibility of a DEDICATED ACCOUNT FUND (DAF).

Trent’s mother opened a separate bank account with a DAF, allowed by Social Security, as it is used only for costs incurred by Trent’s disability. Expenses such as education, job training or medical treatment, special equipment (such as a wheelchair or crutches), therapy and rehabilitation.