GN 00506.100 Criteria for Receiving Fees for Service
To participate in the FFS program, the organization—not its employees, volunteers, or other individuals—must be named the payee. The field office will decide if an organization is qualified. Qualified organizations must meet all the criteria defined in the Social Security Act and SSA regulations.
B. Policy - Requirements
1. State or Local Government Agencies
State or local government agencies must fall within ONE of the following categories of agencies and meet the requirements explained in GN 00506.100B.3.
a. Income Maintenance
An agency is found to have an income maintenance mission if it strives to ensure that its clients attain or maintain a minimal standard of living (usually by the issuance of monetary allowances, food programs, etc). These agencies are generally welfare departments.
b. Social Service
An agency has a social service mission if it performs social work, that is, organized efforts to advance the welfare of the general public or a certain group of people. (For example, a State Department of Social Services)
c. Health Care-Related
An agency can be found to have a health care-related mission if it provides medical services to the public for the treatment of physical or mental limitations or illnesses. (For example, a county hospital or community mental health clinic)
d. Fiduciary Responsibilities
An agency has fiduciary responsibilities if it regularly acts as an agent in administering money or property for the benefit of others. A housing agency operated by a state or local government, a public guardian, or a conservator are good examples.
2. Non-governmental Agencies
Non-governmental agencies must meet ALL of the following criteria and the requirements explained in GN 00506.100B.3.
a. Community Based
An organization is community based if it is located in the neighborhood(s), city (ies), and/or county (ies) which it serves. The letter from the organization requesting permission to charge fees should have a description of the agency's service area.
If an applicant organization is affiliated with a statewide or national association, the individual chapter of the organization must apply separately.
b. Non-profit Social Service
An organization is a non-profit social service agency if it has tax-exempt status under section 501(c) of the Internal Revenue Code and it is established for a religious, charitable or social welfare purpose. Agencies granted tax-exemption will have a ruling or determination letter from IRS to this effect. In many cases, the IRS letter will prove that the agency is both nonprofit and social service. A copy of the IRS letter should accompany the request to collect a fee.
NOTE: The Internal Revenue Code has different categories of tax-exemption—501(c) 3, 501(c) 5, 501(c) 10, etc. For the purpose of determining nonprofit status as a religious, charitable, or social welfare agency, 501(c) (3) and (4) are applicable. If a payee applicant has a different 501(c) status, look at the nature of the organization to determine if it is established for a religious, charitable, or social welfare purpose. If in doubt, consult with the Programs Section of your Regional Office who in turn can request an opinion from the Regional Office of General Counsel.
c. Bonded and Licensed
The organization must be bonded and licensed, provided that licensing is available in the State. (See GN 00506.105C and GN 00506.105D for bonding/insurance guidelines.)
3. Government and Non-Government Organizations
Government and non-government organizations must meet both of the following requirements:
a. Payee for At Least Five Beneficiaries
The organization must be regularly serving as payee for at least five beneficiaries. The information submitted must include a list of the names, Social Security numbers, and resident addresses of all individuals for whom the organization is currently payee.
The RPS or MBR/SSR should be queried to ensure that the organization is payee for at least five of the individuals named on the list. The organization must be the appointed payee for each of the five individuals for a minimum of one calendar month. Please note the payment status field. The beneficiary’s MBR and/or SSR should be an active record.
CAUTION: There may be situations where an organization is payee for five beneficiaries, but is authorized to collect a fee from less than five. An organization is considered to be regularly serving as payee for an individual regardless of whether or not it is authorized to collect a fee from that individual.
b. Not Be a Creditor of the Beneficiaries They Serve
Generally, an organization cannot be a creditor of the beneficiaries it serves. Organizations that indicate they have a creditor relationship with the beneficiaries they serve will be denied approval to collect fees for representative payee services. Collecting a fee for representative payee services in itself does not create a creditor relationship.
An exception to the creditor restriction can be granted when:
The goods or services that create the creditor relationship help to meet the current needs of the beneficiary. To meet this condition, these items must be for the immediate needs of the beneficiary, such as food, clothing, and housing. Creditor relationships, which are established to discharge past debts, do not meet this requirement.
The amount the beneficiary is charged for the organization's services is consistent with rates charged other individuals and is reasonable for the services provided. The organization has a policy that allows it to consider the beneficiary’s ability to pay when determining the amount to be charged for the goods and services it provides.
IMPORTANT: A creditor organization's authorization to collect a fee for serving as payee for one beneficiary does not extend to subsequent applications for other beneficiaries and such authorizations must be made on a case-by-case basis.