Effective Dates: 01/09/2013 - Present Previous | Next

TN 195 (06-21)

GN 02402.050 Account Titles

A. Overview

The beneficiary or recipient’s ownership interest in the account must show in the account title, or in the case of a master-sub account, in both the master account and the sub-account titles. In a master-sub account arrangement, the sub-account may be a checking account, savings account, or ledgers maintained by the master account holder.

SSA must be able to distinguish beneficiary or recipient ownership of funds versus obligation to use funds on behalf of beneficiaries or recipients. With ownership, funds belong to beneficiary or recipient. Obligation means that the funds are set aside for the exclusive benefit of the beneficiary or recipient but does not indicate that beneficiaries own the funds; e.g., funds could be grant money, charitable contributions, or monies from the payee’s own operating budget.

Ownership of funds allows SSA legal access to the funds should there be a dispute on the payee’s use of SSA beneficiary or recipient funds; e.g., misuse cases where funds need to be returned to SSA. A possessive “s” helps distinguish between ownership versus obligation; e.g. “Residents’ Fund” or “Resident’s Fund” versus “Residents Fund.”

B. Different types of depository accounts

The accounts listed below are different types of depository accounts. In each payment arrangement, the Department of the Treasury (Treasury) sends the complete monthly Social Security or Supplemental Security Income (SSI) payment into one depository account. The entire payment must be deposited to a single account

1. Single or joint accounts

Beneficiaries and recipients who do not have representative payees (direct pay) may have their payments deposited into a single or joint ownership account.

NOTE: Joint Financial Institution (FI) accounts for Supplemental Security Income (SSI) recipients may create excess resources issues, see SI 01140.205.

2. Master-sub accounts

A master-sub account is an account at a financial institution (e.g. Bank, savings and loan association, credit union, or thrift institution) (FI) established to receive deposits on behalf of a group of individuals. The master account holder establishes and maintains a sub account for each individual. The sub-accounts may be individual checking or savings accounts established at an FI or ledgers maintained by the master account holder.

A master-sub account is applicable ONLY for representative payees, members of religious groups that take a vow of poverty, nursing homes, investment accounts, and prepaid card accounts that meet the requirements of Treasury, per GN 02402.030B.1. A religious order may only use a master-sub account for members of the religious order who have taken a vow of poverty. A master-sub account is used only for beneficiaries or recipients served by a representative payee that is designated as a payee on SSA records. A nursing home not serving as a representative payee can also use master-sub accounts for the Beneficiaries or recipients who reside in their facilities, see GN 00603.020. For master-sub accounts involving a representative payee, see GN 00603.020B.

NOTE: A master-sub account will appear as one bank account number in the electronic Representative Payee System (eRPS) even though payments received will be sent from the master account to individual sub-accounts for use.

a. Master-sub accounts with religious organizations, nursing homes, investment accounts and prepaid debit cards that are not representative payees

A Title II or Title XVI beneficiary or recipient without a representative payee may have benefits deposited to an acceptable master-sub account if he or she meets the following conditions; for information on acceptable bank account titles, see GN 00603.020D:

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    The beneficiary’s payments must come by direct deposit to a master-account, or to a sub-account that the master account holder has established at an FI;

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    The master account title reflects the beneficiary or recipient as the account owner, and the master account holder (e.g. nursing home, investment company, or religious order where the members take a vow of poverty) reflects a fiduciary interest;

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    The sub accounts are then set up at the same FI, a different FI, or on individual ledgers, the master account holder establishes and maintains as sub-account records for each participant. The sub-accounts records must reflect funds received, funds withdrawn, and each sub account’s remaining balance. This information must be available to the participant upon request;

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    If the sub-accounts are separate checking or savings accounts set up at an FI (e.g., not ledgers maintained by the master account holder), then the sub-account titles must reflect the beneficiary or recipient as the account owner, while reflecting the master account holder as having fiduciary interest.

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    The beneficiary signs an authorization allowing the organization to withdraw monthly amounts for the cost of care. The balance in the account can be used for personal expenditures or other proper uses, or saved for future needs;

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    The arrangement is voluntary on the part of the beneficiary; and

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    The beneficiary has the right to terminate the arrangement at any time.

b. Master-sub accounts with organizations that are representative payees

A representative payee who wishes to use an account with a master-sub structure must follow the same requirements as a collective account, see GN 00603.020B. The payee must:

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    Contact SSA for guidance on how to set up the master and sub accounts before it is established, and

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    Maintain a system of ledgers for the sub accounts that show all transaction activities, including deposits, withdrawals, and each sub-accounts’ remaining balance for each beneficiary.

In addition, the master-sub account must meet the following conditions:

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    The master account is at a bank, savings and loan association, credit union, or thrift institution;

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    The master-sub account is not the operating account of the master account holder;

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    The title of the master 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. For information on acceptable account titles, see GN 00603.020D. The payee must establish a sub-account for each beneficiary that meets the conditions of GN02402.055.

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    A representative payee must either establish sub-accounts that are separate checking or savings accounts at the same financial institution as the master account or a different financial institution that meets the conditions of GN 02402.055.

c. When the representative payee and the master account holder are not the same

In some cases, the representative payee and the master account holder are not the same entity (e.g., the beneficiary lives in a nursing home and the spouse is the representative payee). In this situation, the representative payee of the beneficiary may not relinquish control of the beneficiary’s Title II or Title XVI payments to the master-sub account holder. If the beneficiary resides in a nursing home and his or her representative payee is not the nursing home, the following conditions also apply with regard to the payee authorizing direct deposit of the beneficiary’s check into the master-sub account arrangement.

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    The representative payee must have the benefits deposited into the beneficiary’s sub-account not into the master account held by the nursing home;

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    The titles on these individual accounts must show the representative payee in a fiduciary role, not the nursing home or institution;

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    The arrangement is voluntary on the part of the beneficiary’s representative payee; and

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    The representative payee has the right to terminate the arrangement.

Treasury allows nursing homes to offer master-sub accounts for beneficiaries or recipients for whom they are not the representative payee.

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    For individuals for whom the nursing home is the representative payee, treat the master account as a collective account and apply the policy in GN 00603.020 for all individuals for whom the nursing home is payee. For individuals for whom the nursing home is not representative payee, apply the policy in GN 02402.050.B.2.a in this section and see GN 00603.020H;

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    If the payee is a nursing home that has sub-accounts that are separate checking or savings accounts at a financial institution, follow the policy in GN 00603.010 for the sub-accounts for beneficiaries or recipients for whom the nursing home is payee and follow GN 02402.050.B.2.a. in this section for beneficiaries or recipients for whom the nursing home is not the representative payee; and

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    If the payee is not a nursing home or a religious group that takes a vow of poverty, then only beneficiaries or recipients for whom the master account holder is representative payee may have their checks direct deposited into the master-sub-account.

NOTE: In determining the value of the recipient's recources in a master-sub account arrangement, you must take into consideration the ONLY the Title XVI recipient's own sub-account of ledger. We treat each sub-account as a separate account; therefore, we may send a beneficiary’s payments to a master account held by the payee even if it contains sub-accounts for beneficiaries or recipients who do not have a representative payee. For details on direct deposits for representative payee cases, see GN 02402.055.

C. Examples of acceptable and unacceptable master-sub accounts

1. Example of an acceptable master-sub account arrangement

Individual personal or fiduciary sub-accounts, established in FI, linked to the master-sub account:

In this type of account arrangement, SSA deposits monthly benefits into one master account that contains multiple titled sub-accounts. The sub account’s title reflects the master account holder as holding a fiduciary interest and the beneficiary or recipient as the account’s owner. These accounts show the beneficiary or recipient’s name within the account title. For account arrangements without representative payees or with representative payees responsible for allocating money towards the cost of care, the master account holder may sign a withdrawal agreement to have the cost of care transferred.

EXAMPLE: Comfort Nursing Home maintains a master-sub account titled “Comfort Nursing Home Resident Trust Patients Account” and its respective sub-account is entitled “Comfort Nursing Home for (name of nursing home resident)” at New State Bank for the convenience of its residents. The nursing home sets up separate sub-accounts or ledgers under the name of each resident. Residents sign agreements for the nursing home to withdraw monthly amounts for care costs. Residents can withdraw any amount, up to the balance in their accounts (account with their name) for personal expenses. The nursing home keeps track of all deposits and withdrawals. This account will show up as one bank account in eRPS for all of the beneficiaries or recipients it belongs to rather than listing each separate sub-account in eRPS as a distinct bank account.

2. Example of an unacceptable master-sub account arrangement

A master account established for a check cashing service:

EXAMPLE: Security Check Cashing Service sets up a master account at All-sure Bank, and advertises that it offers direct deposit to its customers. All-sure Bank sets up separate sub accounts for each customer. When the customer wants to withdraw his or her monthly SSA or SSI payment, Security Check Cashing Service provides a check payable to the customer, who can cash the check at Security Check Cashing Service, or elsewhere. This is an unacceptable request for direct deposit of Title II or Title XVI payments because a a master account established for a check cashing service is not one of the categories of master accounts eligible for direct deposit.

D. References

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    GN 00603.010 Conserving Benefits in a Savings or Checking Account

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    GN 00603.020 Collective Checking and Savings Accounts Managed by Representative Payees

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    GN 02402.030 Acceptable Types of Financial Institutions and Accounts

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    GN 02402.055 Direct Deposit for Representative Payee Cases

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    GN 02402.060 Direct Deposit to Trust Accounts

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    SI 01140.205 Joint Checking and Savings Accounts

To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0202402050
GN 02402.050 - Account Titles - 01/09/2013
Batch run: 06/24/2021
Rev:01/09/2013