The Office of the Inspector General for Social Security recently released a report on representative payees. If you are unaware, Social Security uses representative payees to manage Social Security disability benefits for people the agency determines to be unable to manage their own finances due to impairments.
Anytime private parties are used to handle finances of that are not their own, whether they are individuals or companies, there is bound to be some misuse of funds, but the system has to be managed to prevent the person who has been awarded benefits from losing the munch-needed money they deserve and this does not always happen.
The report’s findings identified cases where: Social Security failed to report all payee misuse cases to the OIG; did not reissue benefits to beneficiaries that were misused by representative payees; neglected to obtain restitution from payees that misused benefits; and failed to document decisions of allowing payees that misused funds to continue to operate as payees.
It should be noted that the OIG’s report did indicate that Social Security generally complied with requirements and procedures, but that the agency really needs to get better at monitoring payees.
One major problem Social Security has is it is difficult to find reputable individuals and agencies that are willing to serve as payees for people who are unable to manage their own funds.
The report made some recommendations, which Social Security agreed with, so we shall see if these recommendations improve the effectiveness of the representative payee program. The report noted that in 2012 that there were a total of 230 instances of misuse where beneficiaries that were impacted, which equaled close to $1.2 million worth of funds being misused. The recommendations were basically to rectify all of the major issues involved with the misuse of funds and especially vetting potential representative payees on a more thorough basis. For more information about the report click here.
