TN 31 (03-05)
GN 00502.105 Payee Preference Lists
20 CFR, Sections 404.2021, 416.621
Choose the applicant best suited to serve as payee. The lists in this section are meant as developmental guides only and are not a substitute for full payee development. Each payee application must be reviewed and evaluated individually to determine the best payee. All applicants must be carefully screened and considered before a selection is made to ensure that the beneficiary’s best interest is served. In determining the best payee choice, consider all factors, including the applicant’s relationship to the beneficiary, the applicant’s interest in the beneficiary’s well being and whether or not the applicant has custody of the beneficiary. The applicants shown in this section are the preferred candidates and, generally, are shown in the preferred order of selection.
B. Procedure - Payee Preference Lists For Minor Children
When the beneficiary is a minor child, select the best payee available from this list of preferred applicants:
A natural or adoptive parent with custody;
A legal guardian;
A natural or adoptive parent without custody, but who shows strong concern;
A relative or stepparent with custody;
A close friend with custody and provides for the child’s needs;
A relative or close friend without custody, but who shows strong concern;
An authorized social agency or custodial institution; or
Anyone not listed above who shows strong concern for the child, is qualified, and able to act as payee, and who is willing to do so.
C. Procedure - Payee Preference List For Adults
When you determine that the beneficiary needs a representative payee, select the best payee available from this list of preferred applicants:
A spouse, parent or other relative with custody or who shows strong concern;
A legal guardian/conservator with custody or who shows strong concern;
A friend with custody;
A public or nonprofit agency or institution;
A Federal or State institution;
A statutory guardian (see GN 00502.139);
A voluntary conservator (see GN 00502.139);
A private, for-profit institution with custody and is licensed under State law;
A friend without custody, but who shows strong concern for the beneficiary’s well-being, including persons with power of attorney;
Anyone not listed above who is qualified and able to act as payee, and who is willing to do so;
An organization that charges a fee for its service.
D. Procedure - Payee Preference List For Beneficiaries With A Substance Abuse Condition
When you determine that a disabled beneficiary who is determined to suffer from a substance abuse condition needs a payee, be especially mindful of the qualities a good payee should possess. Don’t select an applicant who might encourage or enable the beneficiary’s continued substance abuse, such as a friend who also suffers from a substance abuse condition.
Since they usually have access to greater resources and community contacts and are less susceptible to coercion or intimidation, we expect organizations to make better payees for this beneficiary population. In all cases, choose the payee applicant who can perform the payee duties, is willing to do so and has the beneficiary’s best interests at heart.
Select the best payee available from this list of preferred applicants:
A community-based nonprofit social service agency bonded and licensed (if required) by the State;
A Federal, State or local government agency whose mission is to carry out income maintenance, social service, or health care-related activities;
A State or local government agency with fiduciary responsibilities;
A designee of an agency (other than of a Federal agency) referred to above, if appropriate; or
A family member.
When none of the preferred payees above are available, select the best payee available from this list of alternate sources:
A legal guardian with custody or who shows strong concern for the beneficiary’s well-being;
A relative or friend with custody who shows strong concern for the beneficiary’s well-being;
A public or nonprofit agency or institution with custody;
A private, for-profit institution with custody and is licensed under State law; or
Anyone not listed above who is qualified and able to act as payee, and who is willing to do so.
NOTE: Studies conducted on individual payees coded as “OTH” have shown that some of these individuals have simply turned the benefit over to the beneficiary without exercising any payee oversight (i.e., acted as “conduits”). If you appoint an individual as payee using “OTH” as the TOP, use your own judgment to decide whether you need to diary the case in order to follow-up on the payee’s performance.
E. Procedure - Using The Payee Preference Lists
There may be instances where the payee applicant you believe is the best choice isn’t the one highest on the above list of preferred applicants. For example, a family member who lives near and shows strong concern for an incapable beneficiary who suffers from a substance abuse condition might be preferred over an organization which is not located in close proximity to the beneficiary. The primary concern in selecting a payee should always be the well being and best interests of the beneficiary. In this instance, you may decide to select the family member.
In cases where you select a payee who is not the highest on the list of possible choices, use the Add Note link to document the Make Note screen in eRPS (or on a RC outside RPS) the reason for your selection.
When Do I Need to Contact a Potential Candidate Who is Higher on the Preference List?
If you become aware of a potential payee candidate who is equal to or higher than the payee applicant on the preference list, contact that potential candidate (to find out if he/she wishes to file) before you appoint the payee applicant.
EXCEPTION: If you have convincing evidence that the potential candidate is clearly not the best choice, you don’t need to contact him/her. Document, on the Make Note screen in eRPS (or on a RC outside eRPS) your reasons for not contacting this candidate.