TN 7 (03-02)
GN 00602.110 Reimbursement for Payee Services
The Social Security Act precludes compensating an individual or entity out of benefits for serving as representative payee; that is, compensating a payee for his/her time and effort or administrative expenses. The Act provides an exception and permits a qualified organization, authorized by SSA, to collect a fee from a beneficiary for expenses (including overhead) incurred by the organization in providing services performed as the beneficiary's representative payee. (See GN 00506.001 for Payment for Representative Payee Services)
B. POLICY - OUT-OF-POCKET EXPENSES
Any representative payee may be reimbursed for reasonable actual out-of-pocket expenses incurred on behalf of the beneficiary. Out-of-pocket expenses are actual expenses for food, housing, medical items, clothing, transportation, and personal needs items incurred on behalf of a particular beneficiary. The payee must keep records and receipts of the beneficiary's expenses.
REMINDER: A payee collecting a fee for representative payee services cannot recover separate “overhead” expenses such as postage, office equipment, photocopying, etc. The fee for representative payee services includes these expenses.
C. PROCEDURE – GUIDELINES FOR APPROVING OTHER OUT-OF-POCKET EXPENSES
A representative payee should obtain SSA approval before he/she uses benefits to pay for other out-of-pocket expenses incurred on behalf of a beneficiary for other than current or reasonably foreseeable needs. Consider the following guidelines when approving a payee's request for reimbursement for other out-of-pocket expenses:
Current and reasonably foreseeable needs of the beneficiary must be met before any reimbursement is taken.
There must be a correlation between the expense incurred and a direct benefit to the individual beneficiary.
Unless current needs are met, there can be no withholding by a payee in anticipation of expenses that may be incurred on behalf of a beneficiary.
The amount of the reimbursement must correspond to the actual expense for a particular beneficiary.
A volume payee cannot add the expenses of all the beneficiaries together and divide by the number of beneficiaries served to determine the amount of reimbursement. Individual records must be maintained.
Documentation of out-of-pocket expenses must be available for SSA review at any time.
If a payee notifies SSA that he/she will not carry out his/her fiduciary responsibilities without compensation, SSA will change payees, institute direct payment, or suspend benefits and develop for a new payee, as appropriate.