Audit Highlight: Disabled Individuals with Mental Impairments in Need of a Representative Payee

Part of the challenge in writing a blog about Social Security issues is making it comprehensible to people who don’t speak “bureaucrat-ese.”  That’s the terminology of complex government program rules and requirements, and the dreaded acronyms that we bureaucrats seem to delight in creating and using.

One of those terms is “representative payee,” which is Social Security’s technical term for a person or an organization selected to manage someone else’s Social Security benefits.  In this blog post, we want to tell you about a recent audit report we issued related to SSA’s representative payee program.

Regardless of what term we use, one of our highest priorities is to make sure that representative payees are complying with laws and regulations, and not misusing the benefits SSA trusts them to manage. We do that by reviewing SSA’s programs and policies and making recommendations for improvement (we also conduct investigations when we find evidence that misuse is occurring, but that’s a topic for a different blog post). 

In a recent such review, an audit report titled Disabled Individuals with Mental Impairments in Need of a Representative Payee, we looked at beneficiaries with mental impairments, and whether SSA was effectively identifying those who needed representative payees. If these beneficiaries receive their benefits directly but aren’t capable of managing them, they may be unable to fulfill basic housing and other critical needs. Therefore, we believe this is a critical responsibility for SSA.

As part of the audit, we interviewed mentally impaired beneficiaries to gauge whether they were, in fact, capable of managing their own benefits. We found that about 23 percent of the people we interviewed didn’t appear to be capable of managing their own benefits, but they did not have a representative payee.  (We were unable to interview another 26 percent of people in our sample, so many of them may also have been unable to manage their own benefits.)

One woman told us that she wrote checks for bills one month without realizing there was no money in her account—so she ended up paying $300 in overdraft fees. We also interviewed a man residing with his parents who couldn’t answer simple questions about his name, where he lived and who lived with him—without prompting from his mother. His mother informed us that he was not able to manage his daily living needs or pay his own bills—yet SSA had not appointed a representative payee for him.

Unfortunately, we discovered that most of those interviewed did not know that the representative payee program even existed.  And we found that SSA does not have a formal process in place to identify beneficiaries who are initially capable of managing their benefits but at some point, become incapable and need a representative payee. 

In the report, we recommended that SSA consider ways to make not only mentally impaired beneficiaries, but also their families and the public, aware of situations when they may need a representative payee. SSA agreed with that, and with our other recommendations. SSA is also going to make a capability determination for all the beneficiaries we identified who we believe may need a representative payee.

You can read the entire audit report at this link.  Please feel free to comment on this report or representative payee issues in general—just remember not to include any personally identifiable information in your comment.