New York Estate Planning & Elder Law Blog
GROWING NEED
More ten million elderly Americans rely exclusively on their Social Security pension as their sole means of support. Approximately 90 percent of senior citizens receive some sort of income from Social Security and approximately half of those relied on Social Security for at least half of their monthly income. It keeps approximately 35 percent of elderly Americans from dipping below the federal poverty line. To say that Social Security is vital to this population is an understatement. Included within that population are a subset of individuals who do not directly receive their income from the Social Security Administration but instead rely on a representative payee to manage their money and pay their bills.
The incidence of Alzheimer’s disease and other related cognitive impairments increases with age and with people living longer, there will naturally be an increase in such conditions and thus a greater need for more Social Security representative payees. The Social Security Administration’s own Inspector General estimated in 2010 that at least one million elderly Americans over the age of 85 need a representative payee but did not have one. Within this group there is concern that there are de facto representative payee who were not formally approved or vetted by the Social Security Administration and could be perpetuating financial abuse of the beneficiary. Of the existing pool of representative payees, approximately three out of four are family members.
A representative payee is a person or organization appointed by the Social Security Administration to manage the monies a person receives from Social Security. The representative payee must adhere to certain statutorily defined although common sense guidelines. To become a representative payee, a person must complete an application. The Social Security Administration relies on state based agencies to further investigate and approve or deny the application.
Currently the Social Security Administration relies heavily on family members to fill this role as they are best able to know the beneficiaries daily needs and lifestyle. They can help structure the beneficiary’s life in a healthy way and possibly save money for future needs. Not all applications are approved, although there is an appeal process. Given the increasing demand for such payees, the Social Security Administration is looking to create a pool of representative payees who are able to accommodate such obligations. Currently the Social Security Administration created a pilot program with the Maryland Pro Bono pilot program.
Many advocacy groups are in support of the efforts to recruit a pool of representative payees, more safeguards must be put in place to ensure the long term viability of such programs. Standards for representatives should be spelled out and made more accessible. Those standards can be a part of training programs and literature implemented by the Social Security Administration. It can look to the various state departments of aging and larger umbrella like organization that contain various community based organizations and senior day care centers. There also needs to be special attention to those senior citizens who do not have any family or friends and exist outside the larger framework of community organizations.