A collective account is one checking or savings account that a payee uses to collect and manage the Social Security or SSI funds entrusted to the payee for each beneficiary they represent. The payee must use the collective account to pay the beneficiary's expenses.

A collective account must have a correct fiduciary title. The term “fiduciary” means the payee may not seek personal benefit from managing the money of those they represent. A fiduciary title shows the payee manages the account but does not own the account. The beneficiaries own the account, but do not have access to the account. In the account title “payee’s name for Social Security/SSI Beneficiaries,” payee’s name designates who is responsible for managing the account, and for Social Security/SSI Beneficiaries designates who owns the account.

A collective account normally contains only Social Security or SSI funds, for beneficiaries or recipients who are served by the representative payee that manages the collective account. However, some nursing facilities use resident trust fund (RTF) accounts as a collective account. These accounts can contain funds for beneficiaries and recipients who do not have a payee, and for residents who receive other federal benefits. These accounts are acceptable as a collective account, as described in GN 00603.020C in this section.

A representative payee is responsible for managing, documenting, and reporting the use of all funds they receive as a payee. The payee must keep accurate accounting records clearly showing the deposits, withdrawals, expenditures, and interest for Social Security or SSI funds for each Social Security or SSI beneficiary for whom they are payee. The payee must maintain a separate account ledger for each collective account, and maintain separate records in the ledger for each beneficiary and recipient associated with the collective account. The payee must have an accounting system that regularly reconciles all withdrawals and expenditures paid from a collective account, using the beneficiaries' funds, with the associated accounting ledger for each beneficiary. The payee can pay expenses individually or collectively, but must keep accurate records clearly documenting each beneficiary’s individual expenses and each beneficiary’s individual dollar amount of any total collectively paid from the collective account. The collective account must also be reconciled with its bank statements on a monthly basis. All documentation must be available to us at any time. A payee may have more than one collective account. Each collective account must be approved by SSA.

The funds deposited in a collective account are for the beneficiaries' needs. Payments and transactions from the collective accounts are only for the beneficiaries’ expenditures. Each collective account managed by a payee must be separate and distinct from all operating, business, and facility accounts. The payee cannot commingle beneficiaries’ funds with the payee’s money, the organization’s money, or any money belonging to the organization’s officers. The payee cannot lend a beneficiary’s money to anyone.

The payee must establish the collective checking or savings account at an acceptable financial institution. Information on financial institutions is located in GN 00603.020E.1.d in this section.

The representative payee must:

1. a. 

   contact us before establishing a new collective account;

2. b. 

   correctly establish the collective account by:

   • •

     setting up the collective account as a separate account;

   • •

     titling the account in a fiduciary capacity on behalf of the beneficiaries, as described in GN 00603.020A.1. in this section. (For specific titling examples, refer to GN 00603.020D in this section);

   • •

     providing documentation showing the account title such as a bank statement; and

   • •

     obtaining SSA approval of the documentation and the collective account prior to using it;

3. c. 

   use the collective account to pay the beneficiaries’ expenses;

4. d. 

   deposit and manage the Social Security and SSI funds in the approved collective account, not in the operating account, business account, or any other account that SSA did not approve, as described in GN 00603.020C.3. in this section. The payee can deposit non-SSA funds into the collective account, as described in GN 00603.020E.1.c. in this section;

5. e. 

   account for all funds entrusted to the payee for each beneficiary by establishing and maintaining an accounting system that:

   • •

     ensures a complete and separate accounting of each beneficiary’s funds deposited to the collective account; and

   • •

     reconciles all checks and transactions paid from the collective account with the accounting ledger for each beneficiary.

6. f. 

   not allow a beneficiary direct access to their own funds;

7. g. 

   not commingle beneficiaries' funds with the payee’s money, the organization’s money or any money belonging to the organization’s officers, directors or employees;

8. h. 

   not loan beneficiary funds in the collective account to another beneficiary or to the organization’s officers, directors or employees; and

9. i. 

   not give the beneficiary’s funds to someone else to manage, unless the employee represents the payee. EXAMPLE: Manor Corporation is a payee and receives benefits for Lily, who resides at Manor Corp’s facility: Gentle Manor Nursing Home. After Manor Corp. pays Lily’s expenses for this month, $50 remains for Lily’s Personal Needs Allowance (PNA). It is acceptable for Manor Corp. to transfer the PNA to Gentle Manor for Lily’s use. However, Manor Corp. must document the transfer, and Gentle Manor must keep its own ledger and maintain documentation for Lily’s expenses. Manor Corp. must have access to Gentle Manor's ledgers to present to SSA when requested.

Each beneficiary associated with the collective account must have their deposits, expenditures, and transfers documented in the related account ledger.

For each beneficiary, the payee must:

1. a. 

   account for all deposits received as payee by maintaining records that document each individual beneficiary’s funds. This includes:

   • •

     listing a beneficiary’s Social Security and SSI deposits;

   • •

     posting any interest due the beneficiary; and

   • •

     reconciling a beneficiary’s deposits and interest on the monthly collective account statement to each beneficiary’s account in the account ledger.

2. b. 

   account for all expenditures from a beneficiary’s funds by showing whom they paid, the amount paid, and the date paid. This includes documenting a beneficiary’s individual dollar amount of any total collectively paid from the collective account;

3. c. 

   document the PNA, if applicable. A payee must list the PNA as one entry in that month if the payee transfers the PNA to the payee’s employee to manage, as explained in GN 00603.020B.1.i. in this section. However, the employee or facility who receives the PNA must maintain a ledger documenting receipt of the PNA for the beneficiary, and document the beneficiary’s expenditures, as described in GN 00603.020F.3. in this section; and

4. d. 

   account for all transfers of a beneficiary’s funds by documenting any funds moved to another account or financial vehicle. EXAMPLE: The collective account balance is $502.00 and $500.00 of it belongs to James. The payee moves the $500.00 from the collective account to a correctly titled Certificate of Deposit (CD) for James. The account ledger must reflect this CD as conserved funds.

As of September 2011, the U.S. Department of the Treasury allows the delivery of federal payments to RTFs held by nursing facilities. These accounts are also known as patient fund accounts and are limited to Nursing Facility usage only. These accounts pool federal benefits for residents:

• •

  who receive Social Security and/or SSI benefits and the nursing facility is their representative payee;

• •

  who directly receive Social Security and/or SSI benefits (beneficiaries without a representative payee); and

• •

  who authorize the deposit of other funds, such as pensions and VA payments.

As of March 1, 2013, all federal benefits must comply with Treasury’s Electronic Initiative, which eliminates paper checks. Nursing facilities use the RTF to comply with the initiative. If a financial institution allows a facility to use an RTF account, you can approve the account as a collective account, using the following requirements. The account must:

• •

  show the payee’s name in the RTF title (payee’s name Resident Trust Fund);

• •

  be managed by the named payee; and

• •

  receive the full deposit of each beneficiary’s Social Security and SSI benefits.

IMPORTANT: If a beneficiary has a representative payee, the facility must be that representative payee in order to receive a beneficiary’s benefits. The facility cannot receive a beneficiary’s benefits that SSA has designated to another payee.

We do not consider some RTFs collective accounts. This often occurs when a corporation has established an RTF for their residents, but they are not the payee that SSA selected to receive and manage funds. For examples of when an RTF is and is not considered an acceptable collective account, see GN 00603.020H.3. and GN 00603.020C.1. in this section

For RTF titling examples, refer to GN 00603.020D in this section.

For RTF titling scenarios, refer to GN 00603.020H.3. and GN 00603.020H.4. in this section.

For other RTF policy, refer to GN 00603.020E.1.c. in this section.

Financial institutions use master-sub account configurations for various business purposes. Master-sub accounts involving representative payees require that the payee establish a separate checking or savings account, as a sub account, for each beneficiary or recipient. The title of the master and sub account must show that the payee holds the account in a fiduciary capacity on behalf of the beneficiaries or recipients and that the beneficiaries or recipients own the account without having access to it.

Master-sub accounts involving representative payees are required to follow the same rules and requirements as a collective account covered in this section. The payee must:

• •

  contact SSA for guidance on how to set up the master-sub account before it is established;

• •

  maintain a system of ledgers for the master and sub accounts that show all transaction activities including deposits, withdrawals, and each sub-accounts remaining balance for each beneficiary; and

• •

  establish a separate, properly titled, checking or savings account, as a sub account, for each beneficiary or recipient.

  Payees using SSA-approved master-sub accounts must have funds deposited into the master account, not the sub account, except in the situation described in GN 02402.050B.2.c.

Field office management or staff designated by management must adhere to the collective account responsibilities outlined in GN 00603.020G to ensure that the payee establishes the master-sub account properly.

For specific master-sub account policy, refer to GN 02402.050 and GN 02402.055.

The following situations are often confused with collective accounts, but they are not collective accounts.

Payees may enter into contracts with third-party vendors or may use its own parent corporate office to handle client/resident fund accounts and to provide accounting services. However, we hold the payee responsible for establishing the accounts and providing us with the complete accounting of each beneficiary’s funds, as described in GN 00603.020B in this section. The payee is also responsible for determining the beneficiary’s needs and managing the use of funds to meet those needs. The payee, not the third party or corporate office, must timely submit complete annual accounting reports and final accounting reports.

Although a vendor or corporate office handles the representative payee’s accounting, the payee cannot outsource its fiduciary responsibilities. Our relationship is with the representative payee.

1. a. 

   Bank accounts must include the representative payee’s name in the fiduciary title, not the vendor’s or corporate office's name.

2. b. 

   Our records (Form SSA-11-BK Request to be Selected as Payee), and eRPS, must have the representative payee’s name on them, not the vendor’s or corporate office's name.

3. c. 

   For corporate or third-party vendor RTF titling scenarios, refer to GN 00603.020H.

The collective account title must show that the payee holds the account in a fiduciary capacity on behalf of the beneficiaries. The payee’s name on the collective account title must match the payee’s name in eRPS.

The beneficiaries must own the account without having access to it. The payee manages the funds, but cannot have a personal interest in the account (incorrectly titled as a joint account). For parent and spouse exceptions, refer to GN 02402.055A.3.

Some acceptable collective account titles are:

• •

  Payee’s name for Social Security/SSI Beneficiaries;

• •

  Payee’s name for (any similar term describing Social Security/SSI Beneficiaries, such as "SSA beneficiaries"); and

• •

  Payee’s name Resident Trust Fund.

Examples

For examples of proper accounts titles involving an organizational payee using a “doing business as” (DBA) name, see GN 00603.020D.3.c.

There are account-titling exceptions for State and local government organizational payees.

The following pertains to organizational payees.

IMPORTANT: Only the designated representative payee for a beneficiary can receive the beneficiary’s Social Security or SSI funds.

Payees use collective accounts to eliminate or reduce the amount of service charges or other fees charged to beneficiaries by the financial institution. A payee may use an account that charges the beneficiary individual account fees or prorate the fees associated with the collective account. We strongly encourage payees to avoid or minimize such fees. If a payee is allowing the financial institution to assess excessive or unnecessary fees, this may be one indication that the payee is not serving the best interests of the beneficiaries.

Any interest earned by the collective account belongs to the beneficiaries. The payee should prorate and credit interest to each individual beneficiary, based on their share of funds in the account, as described in GN 00603.010.

The representative payee can transfer money for transactions such as cost-of-care, PNA, or to conserve a beneficiary’s funds.

The payee can make payments from the collective account using any method acceptable to the financial institution, such as electronic funds transfer (EFT) or a paper check. The payee can transfer a beneficiary’s PNA to a bankcard or prepaid card, as described in GN 00603.020C.3.d. in this section.

Payees may transfer money, such as cost-of-care, fee-for-service fees, or another reasonable expense, from the collective account to another account, such as their operating account, to pay themselves or others, as explained in GN 00603.020C.3.b. in this section. The payee must thoroughly document transfers to an operating account or business account for Social Security review.

Payees must have policies in place to timely return outstanding funds to the collective account that originally received the funds and document voided transactions on the beneficiary’s sub account ledger, when warranted.

A payee must:

1. a. 

   understand and comply with our collective account policies and procedures, as summarized in GN 00603.020A in this section;

2. b. 

   establish and maintain a collective account and its related ledger according to our policy in GN 00603.020B in this section;

3. c. 

   title the collective account as described in GN 00603.020D in this section;

4. d. 

   manage the account according to our policy in GN 00603.020E, GN 00603.020F.2. and GN 00603.020F.3. in this section; and

5. e. 

   understand and comply with all other collective account policies and procedures, as described in this section.

A payee must accurately manage and maintain each beneficiary’s benefits by:

1. a. 

   maintaining a system that ensures a complete and separate accounting of each beneficiary’s funds entrusted to the payee;

2. b. 

   accounting for all funds deposited into the collective account, and all withdrawals and expenditures from the collective account, with the expenditures documented on each beneficiary’s account ledger. The accounting must include transfers to other accounts for cost-of-care, fees, PNA or any other expense; show any outstanding items; and show any funds moved to a conserved funds account.

3. c. 

   reconciling monthly all bank accounts and their associated ledgers containing beneficiary’s funds with the payee’s use of these funds; and

4. d. 

   keeping electronic or printed copies of the reconciliations.

A payee must document all accounts and transactions involving a beneficiary’s funds by:

1. a. 

   having the account title show that the funds belong to the beneficiaries and not the payee; and that the payee manages the account;

2. b. 

   ensuring clear and current records show the amount of each individual beneficiary's share in the account;

3. c. 

   having access to any account statement or supporting record involving a beneficiary’s funds;

4. d. 

   providing the account statements, supporting records, and a complete and separate accounting of each beneficiary’s funds entrusted to the payee, upon our request. Electronic documents, such as scanned receipts or bank statements are acceptable records, as long as they are available to us. For example, we cannot access a payee’s bank account online to review the payee’s bank statements, but the payee can download the files and give them to us.

In addition, care facilities should maintain a petty cash log or account ledger for a beneficiary’s personal spending funds, also known as the PNA. The payee must make the log available to us and should include the date and amount of funds received, the owner and beneficiary’s name, intended use of the funds, a beneficiary’s signature, and a staff signature.

Use eRPS to document collective accounts. Enter and update approved collective accounts, as described in MS 07418.001 and MS 07418.002.

When entering a newly approved collective account, set the initial expiration date of the approval by adding three years to the date the collective account is established. eRPS allows the expiration date of not less than 6 months or more than 3 years from the current date.

EXAMPLE: Bruce Doe is a lawyer serving as an individual payee for 15 Social Security beneficiaries. The law firm is not the payee. You explain the collective account requirements to Mr. Doe, and he opens a collective checking account titled Bruce Doe for Social Security/SSI Beneficiaries. He provides you with a bank statement or other bank documentation showing this title and the account number. You approve the account on October 13, 2018, and use the account documentation to set up direct deposit into the collective checking account for all of the beneficiaries entrusted to Bruce Doe.

Finally, you establish, Bruce Doe in the collective account in eRPS as described above. Use the initial approval date (10/13/18) to determine the expiration date. In this case, set the expiration date to 10/13/2021.

Select one beneficiary’s financial transactions for a one-year period. Review the transactions to determine if the payee is maintaining the account properly, the bank statements are reconciled, and the account title is correct. If the payee is complying with our collective account policy and procedures, approve the account and reset the expiration date for the next three-year period.

If the account is not in compliance, document facts and problems using the Make Note screen in eRPS under the Rep Payee Details. Review the issues with the payee and follow up with the payee in 90 days to verify the problems are resolved.

EXAMPLE: If the expiration date was 3/31/2019 and the payee's collective account remains compliant, set the expiration date to 03/31/2022.

When the collective account for a particular payee is expiring, eRPS creates a work issue “Collective Account Recertification” three months before the expiration date in the Workload Management screen. eRPS creates a second recertification alert during the expiration month. This recertification can be viewed in eRPS under the Workload Management screen. Follow GN 00603.020G.2 for instructions on how to review the account for compliance and approval.

If the FO fails to review and approve the account, eRPS automatically terminates the payee’s collective account information during the following month (30 days after expiration date).

This deletion causes two issues:

• •

  If the account is no longer active in eRPS, the payee’s collective account information on their next accounting report will not match our files, and the electronic Representative Payee Accounting (eRPA) system will generate an exception. Wilkes-Barre (WBDOC) will initially receive the exception, but WBDOC cannot update the account information. WBDOC and the Processing Centers (PC) can only query eRPS. You receive a pending annual accounting exception case and must resolve the exception; or

• •

  If the account is no longer valid as a collective account, you must request the account documentation from the payee to see if the account is still active and compliant with our collective account policies and procedures. You must review and approve the collective account again. EXAMPLE: ABC Mental Health, Inc., a representative payee, has an approved collective account with a 09/2019 expiration date. In June 2019, you receive an alert to review the account. In September 2019, you receive the second alert. You do not review the account and eRPS automatically deletes it in October 2019. In January 2020, the payee submits an accounting report designating they have a collective account. The report is now an exception in eRPA and refers the report to the field office to resolve. Since the status of this collective account is no longer available after four months, you must review the account documentation to see if it is still active and compliant. You must review, approve, and establish the collective account in eRPS again. Set the new expiration date based on your new approval date.

  NOTE: 

  To view terminated collective accounts, see MS 07418.004 and MS 07418.005 for information and guidance.

A payee that has an approved collective account may be subject to a payee site review. Some payees receive a site review every four years, but we must review collective accounts every three years. For an overview of monitoring, refer to GN 00605.635.

Before the site review, query the collective account in eRPS, to verify that the payee has an approved collective account and to determine the expiration date. After the site review, if the collective account is in compliance, reset the expiration date in eRPS. Use the review date as the basis for the next three-year interval. If the account is not in compliance, follow the instructions in GN 00603.020G.2. and GN 00603.020G.3.

EXAMPLE: A site review is conducted at Sunnydale Nursing Facility in February 2019. A query of the collective account eRPS shows the approval expires in 14 months (04/2020). After the review, the FO determines if the payee maintained the collective account in compliance with our policies and procedures. Use the site review date (02/2019) to calculate the new expiration date and reset it to 02/2022.

Terminate the collective account in eRPS when the payee no longer serves as payee, or when they no longer maintain a collective account for beneficiaries.

The nursing facilities, Gentle Manor and Daisy Manor, are the organizational representative payees. Each facility must establish its own collective account to receive Social Security and SSI deposits for the beneficiaries they serve. Each nursing facility must maintain a separate account ledger for the collective account, and maintain separate records in the ledger for each beneficiary and recipient associated with the collective account. For PNA documentation information, refer to GN 00603.020F.3 in this section. Each nursing facility completes an annual accounting report for each of their beneficiaries.

The FO will enter each payee in eRPS with the payee’s own business name, even if the payees use the corporate EIN. Although Manor Corp. owns both nursing facilities, Gentle Manor and Daisy Manor cannot share a collective account because they are responsible for different beneficiaries. The corporation, Manor Corp., cannot set up one collective account, because the corporation is not the payee for any of the beneficiaries.

If Manor Corp. is the most suitable payee for its beneficiaries, you will enter Manor Corp. as the payee in eRPS.

Manor Corp. decides to have one collective account to receive all of the Social Security and SSI deposits for all residents of the facilities it owns. Manor Corp. must also establish a separate account ledger for the collective account, and maintain separate records in the ledger for each beneficiary and recipient associated with the collective account.

The payee cannot transfer beneficiaries’ money to its other businesses. The payee cannot allow their other businesses, such as the nursing facilities, to administer the funds. The only exception is the PNA.

PNA information, and examples, are located in this section as follows:

• •

  for transfer example, refer to GN 00603.020B.1.i.

• •

  for documentation policy, refer to GN 00603.020B.2.d.

• •

  for prepaid card policy, refer to GN 00603.020C.3.d. and

• •

  for petty cash log example, refer to GN 00603.020F.3.

In addition, Manor Corp. must:

• •

  maintain a system that ensures a complete, and separate accounting of each beneficiary’s funds; and

• •

  complete an annual accounting report for each beneficiary.

Manor Corp. has an RTF account for residents at Gentle Manor and Daisy Manor, who do not have a representative payee. The account receives Social Security, SSI, and Veteran’s Administration (VA) deposits. The title of the account is Manor Corp. Resident Trust Fund.

Daisy Manor:

• •

  serves as payee for 15 of its residents;

• •

  cannot use the Manor Corp RTF;

• •

  must establish its own collective account and account ledger for the 15 residents;

• •

  must include Daisy Manor’s name in the collective account title; and

• •

  can use a RTF account titled, “Daisy Manor Resident Trust Fund”, as described in GN 00603.020H.4. in this section.

Daisy Manor cannot use the Manor Corp. RTF account since:

• •

  Daisy Manor does not manage the account or have access to the account documentation;

• •

  Daisy Manor is the payee, not the Manor Corp; and

• •

  the payee must deposit the beneficiaries’ funds into an account that shows the payee is the manager of the fiduciary account (payee’s name for Social Security/SSI Beneficiaries).

Manor Corp. cannot receive the deposits for residents with Daisy Manor selected as the representative payee because Manor Corp. is not the payee for any of the beneficiaries. However, Manor Corp. can receive the deposits for beneficiaries Manor Corp. serves as payee.

Manor Corp. is the payee. It receives $950 for a beneficiary.

Example 1: We deposit the $950 into the account: Manor Corp. Resident Trust Fund. Manor Corp. transfers $900 from the RTF into its operating account to pay for the beneficiary’s cost of care; then documents the $50 remaining in their RTF, using their account ledger system. (Acceptable); or

Example 2: We deposit the $950 into the account: Manor Corp. Resident Trust Fund. Manor Corp. retains the cost-of-care for each beneficiary and sends the PNA to Daisy Manor. Manor Corp. deposits the $50 into the Daisy Manor Resident Trust Fund. Daisy Manor documents the $50 using their account ledger system. Manor Corp. reviews the ledgers maintained by Daisy Manor and can present them to SSA when requested. (Acceptable)

Daisy Manor has an RTF account for Social Security and SSI deposits of its residents who do not have a representative payee. The account also receives some of the resident’s VA deposits. The title of the account is “Daisy Manor Resident Trust Fund”.

Daisy Manor is the representative payee for 15 of its residents. Two other residents have representative payees other than Daisy Manor. Daisy Manor can use the Daisy Manor Resident Trust Fund for the 15 residents its serves as payee.

Daisy Manor:

• •

  must maintain a system that ensures a complete and separate accounting of each beneficiary’s funds;

• •

  must complete an annual accounting report for each of its 15 beneficiaries; and

• •

  cannot accept SSA benefits for the two residents who have individual representative payees.

Example 1: Daisy Manor is the payee for a beneficiary who receives $1500 monthly in Social Security benefits. We deposit the $1500 into an account titled Daisy Manor Resident Trust Fund. Daisy Manor transfers $1450 to Manor Corp. for the beneficiary’s cost of care; then documents the remaining $50 using their account ledger system. (Acceptable); or

Example 2: A representative payee, other than Daisy Manor, receives $1200 for their parent who resides at Daisy Manor. Daisy Manor asks the payee to sign a Request for Direct Deposit (SF-1199A) to deposit the mother’s benefits into Daisy Manor Resident Trust Fund and the payee agrees. (Unacceptable).

You must inform the payee that they cannot deposit benefits entrusted to them to an account she cannot manage or access. You must inform Daisy Manor that they are not the representative payee and cannot receive the funds. Remind the payee that she will have to account for the benefits she receives when she gets the annual accounting form.

Atlas Funds Management Co. is a third-party vendor that handles accounting for Manor Corp. Atlas establishes a Resident Trust Fund (RTF) account, titled “Atlas Resident Trust Fund” to receive federal direct deposits for Gentle Manor Nursing Facility and Daisy Manor Nursing Facility. The residents at Gentle Manor and Daisy Manor, who do not have a representative payee, direct the facilities to manage their funds. However, Daisy Manor is also the payee for 15 residents who receive Social Security and SSI benefits. Two other residents have representative payees, other than Daisy Manor. Daisy Manor must establish a properly titled collective account and an account ledger for the 15 residents. Daisy Manor cannot accept the benefits for the 2 residents who have other representative payees. Atlas Funds cannot accept benefits for the 17 residents who have representative payees. See the examples in GN 00603.020H.4. in this section.