TN 9 (01-15)

GN 00603.020 Collective Checking and Savings Accounts Managed by Representative Payees

A. Collective account overview

We may allow representative payees to “collect” Social Security or Supplemental Security Income (SSI) benefit payments for any number of beneficiaries and recipients in one deposit account. We call this a collective account. Institutions, agencies, and individual payees establish and use this “collective” checking or savings account to minimize costs and streamline maintenance.

Field Office (FO) management reviews, approves, and monitors collective accounts. The payee must contact the FO before establishing a collective account. The FO management:

  • reviews the collective account requirements with the payee before the collective account is established;

  • receives the collective account documents from the payee;

  • determines if the accounts and documentation comply with our policy;

  • approves the account if the collective account and ledger meet our requirements as described in GN 00603.020B in this section; and

  • documents the approved collective account information in the Electronic Representative Payee System (eRPS).

1. Collective account definition

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 beneficiaries’ expenses. The payee must document the expenses in an account ledger and maintain separate records in the ledger for each beneficiary and recipient associated with the collective account. 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.

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 have a representative payee. 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.1. in this section.

IMPORTANT: A collective account with its associated ledger is not a master account with sub accounts. For more details about master-sub accounts, refer to GN 00603.020C.2.a. in this section. For specific master-sub account policy, refer to GN 02402.050.

2. Summary of payee’s responsibilities

A representative payee is responsible for managing, documenting, and reporting the use of all funds they receive as a payee. The payee can manage the funds using a collective account that has been established and titled according to the policy in this section. Social Security must also approve the account before the payee uses the account.

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. A payee may have more than one collective account. 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 beneficiaries’ funds, with the associated accounting ledger for each beneficiary. 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.

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.

B. Policy for a collective account

FO management or staff designated by management may approve a collective checking or savings account established to hold monies belonging to more than one beneficiary. The payee must understand and comply with the policies and procedures in this section when establishing and maintaining a collective account.

IMPORTANT: A collective account cannot be the payee’s operating account. Federal Deposit Insurance Corporation (FDIC) insurance covers only properly titled collective accounts.

1. Establishing and maintaining the collective account

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. contact us before establishing a new collective account;

  2. 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; and

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

  3. use the collective account to pay the beneficiaries’ bills;

  4. deposit the Social Security and SSI funds into the approved collective account, not into the operating account, business account, or any other account that SSA did not approve, as described in GN 00603.020C.2.d. 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. 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. not allow a beneficiary direct access to his or her own funds;

  7. not commingle beneficiary’s funds with the payee’s money, the organization’s money or any money belonging to the organization’s officers, directors or employees;

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

  9. 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 for Lily’s expenses.

2. Establishing and maintaining the account ledger

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

For each beneficiary, the payee must:

  1. 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. 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. document the Personal Needs Allowance (PNA), if applicable. A payee can 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.g. in this section; and

  4. 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.

C. Further defining what is an acceptable collective account

The standard definition of a collective account and related accounts is in GN 00603.020A.1. in this section.

The following relates to other types of acceptable collective accounts:

1. Resident Trust Account (RTA) or Resident Trust Fund (RTF)

As of September 2011, the Treasury Department allows the delivery of federal payments to RTAs or RTFs held by nursing facilities. These accounts are also known as patient fund accounts. These accounts pool federal benefits for residents:

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

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

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

NOTE: We use RTF in the rest of this section to refer to RTFs and RTAs.

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 we have designated to another payee.

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.

2. What is NOT a collective account

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

a. Master-sub accounts

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 a sub account lists the beneficiary’s name in the fiduciary title.

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

b. Deposits made to individual accounts

The payee may transfer funds from a collective account to a separate, correctly titled individual account or financial investment account, as shown in the example in GN 00603.020B.2.c. in this section. However, the individual account is not part of the collective account.

c. Operating accounts

An operating account is not a collective account. A payee cannot use an operating account, business account, or any other improperly titled account to receive the direct deposit of a beneficiary’s funds.

A payee may transfer a beneficiary’s cost-of-care, fee-for-service fee, or other reasonable expenses from a correctly titled collective account to another account, such as the payee’s operating account, to pay themselves or others. For an explanation of reasonable expenses, refer to Use of Benefits, GN 00602.000. The payee must maintain accurate records as explained in GN 00603.020B.1. in this section. For government exceptions, see GN 00603.020D.2. in this section.

d. Direct Express cards are not collective accounts

According to the Direct Express Debit Card Program policy, individual payees can request one Direct Express card to contain the benefits for multiple beneficiaries. Although the Direct Express card is not a collective account, the payee must establish and maintain an account ledger system, as described in GN 00603.020B.2. in this section to ensure a full and separate accounting of each beneficiary’s funds entrusted to the payee. Direct Express cards are not available to organizational payees. For complete information about Direct Express cards, refer to GN 02402.007.

e. Prepaid debit or credit cards are not fiduciary accounts

A prepaid debit or credit card, or a gift card cannot replace a collective account. These cards titles do not include the fiduciary requirement. However, a payee can give a beneficiary his or her personal needs allowance (PNA) using one of these cards, if the beneficiary agrees and if there are no fees associated with the card. The payee must document the transfer of the PNA to a card as described in GN 00603.020B.2.d. in this section. For additional information about prepaid cards, refer to GN 02402.030D.

IMPORTANT: We do not consider some Resident Trust Accounts (RTA) or Resident Trust Funds (RTF) collective accounts. This often occurs when a corporation has established an RTA or RTF for their residents, but they are not the payee SSA designated to receive and manage funds. For examples of when an RTA or RTF is and is not considered an acceptable collective account, see GN 00603.020H.3. and GN 00603.020C.1. in this section.

3. Third-party vendors and collective accounts

Payees may enter into contracts with third-party vendors 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, must submit complete annual accounting reports and final accounting reports, in a timely manner.

A payee cannot outsource the following responsibilities:

  1. Bank accounts must include the representative payee’s name in the fiduciary title, not the vendor’s name. Our relationship is with the representative payee.

  2. 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 name.

  3. Although a vendor handles the representative payee’s accounting, the vendor cannot receive the Social Security and SSI deposits into their own (vendor’s) account and then transfer the funds to the payee.

  4. For corporate or third-party vendor Resident Trust Fund policy, see GN 00603.020C.2.b. in this section.

D. Collective account titles

1. General collective account titles

The collective account title must show that the payee holds the account in a fiduciary capacity on behalf of the beneficiaries. 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.

Collective account titles must be:

  • payee’s name for Social Security/SSI Beneficiaries;

  • payee’s name for (any similar term describing Social Security/SSI Beneficiaries); and

  • payee’s name Resident Trust Fund.

Examples:

If the collective

account title is:

Acceptable

Reason

Helping Hands

No

This is a general account, not a fiduciary one.

Jane Smith for Social Security Beneficiaries

Yes

This is an appropriate title for an individual payee.

Helping Hands Fund for Social Security Beneficiaries

Yes

  

   

These are appropriate titles for the organizational payee, Helping Hands.

NOTE: Helping Hands’ name and address must be in eRPS as the org payee. Helping Hands’ can use the corporate employee identification number (EIN).

Helping Hands Fund for Social Security/SSI Beneficiaries

Helping Hands Resident Trust Account. See GN 00603.020C.1. in this section.

Helping Hands Trust

(a traditional trust account)

No

A payee cannot use a traditional trust fund as a collective account.

State and local government agency payees

Yes

There are account titling exceptions,

see GN 00603.020D.2. in this section.

Organization payee account titles and DBA

Yes

For policy concerning “doing business as” (DBA) titles, see GN 00603.020D.3. in this section.

2. State/local government accounts and collective account titling

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

a. General depository account

A State or local government may require a subordinate agency to deposit all receipts into the State/local government’s general depository account that routes the deposits to an agency specific sub account.

The agency payee may use a State/local general depository account provided:

  1. The State/local government requires the use of the general depository account;

  2. The State/local government promptly routes beneficiary’s funds from the general depository account to a payee’s fiduciary sub account set up for the beneficiary;

  3. The sub account protects beneficiary’s funds from any State/local government use; and

  4. The payee complies with the payee responsibilities set out in this section.

b. Child care or foster care account

A State or local government may have a current childcare fund, foster care account, or similar account to receive funds and pay expenses. The agency payee may use this account provided:

  1. The State/local government uses this fund to receive the Social Security and SSI benefits;

  2. The State/local government uses this fund to pay routine cost-of-care expenses;

  3. The State/local government maintains sub account ledgers detailing cost of care and the Social Security and SSI deposits for each child beneficiary;

  4. The sub account protects beneficiary funds from any State/local government use; and

  5. The payee complies with the payee responsibilities set out in this section.

3. Additional account titling criteria for organizational payees

The following pertains to organizational payees.

a. Using “doing business as” (DBA) names for collective accounts

A corporation can operate its business using a DBA name. The corporate name is the legal name. The DBA name is the business name of one of the entities of the corporation. A corporation can have multiple businesses and use different DBA names to identify them.

EXAMPLE: Manor Corporation owns two community-based nursing facilities. The corporation does business as:

  • Manor Corporation DBA Gentle Manor Nursing Facility; and

  • Manor Corporation DBA Daisy Manor Nursing Facility.

In this example, if Gentle Manor is a payee, Gentle Manor must manage the collective account.

b. Collective account titles for organizational payees

We expect organizational payees to be community-based, whenever possible. If the community-based entity, not the corporation, is the payee, the payee’s name must be part of the collective account title and must be in eRPS. Do not use the corporate name unless the corporation is the payee.

Using the Manor Corporation example in GN 00603.020D.3.a. in this section, we expect the individual nursing facilities; Gentle Manor and Daisy Manor, to be the payees, not Manor Corporation. When using a collective account, each payee would have an account using that specific business’s DBA name. The payee must deposit Social Security and SSI funds into the payee’s collective account. In this example, Gentle Manor receives the deposits for Gentle Manor residents and Daisy Manor receives the deposits for Daisy Manor residents.

c. Examples of collective account titles for organizational payees

The following shows examples of acceptable and unacceptable collective account titles using Manor Corp. and Manor Corp. DBA Daisy Manor:

If the collective account title is:

Acceptable

Reason

Manor Corp.

No, neither can use this as a collective account.

This is a corporate account, not a fiduciary account.

Manor Corporation DBA Daisy Manor Nursing Facility

No, neither can use this as a collective account.

This is the nursing facility’s business account.

Manor Corporation DBA Daisy Manor Nursing Facility Resident Trust Fund

Yes, if the payee is Daisy Manor.

See GN 00603.020C.1. in this section.

Daisy Manor Resident Trust Account

Yes, if the payee is Daisy Manor.

See GN 00603.020C.1. in this section.

Manor Corporation Resident Trust Account

Yes, if the payee is Manor Corp.

See GN 00603.020C.1. in this section.

No, if the payee is Daisy Manor.

See GN 00603.020C.2.b. in this section.

Daisy Manor Fund for Social Security Beneficiaries

Yes, if Daisy Manor is the Payee.

NOTE: Whenever Daisy Manor is the payee, Daisy Manor’s name and address must be in eRPS as the org payee. Daisy Manor can use Manor Corp.’s EIN.

Manor Corp. Fund for Social Security Beneficiaries

Yes, if Manor Corp is the payee.

NOTE: Manor Corp.’s name, address, and EIN must be in eRPS as the org payee.

E. Deposits, fees, and transfers concerning the collective account

The following applies to collective account transactions:

1. Deposits to the collective account

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

a. General deposit policy for collective accounts

As a representative payee, the payee must receive the deposit of Social Security or SSI funds in a fiduciary account with the payee’s name in the title. The payee must title the collective account as described in GN 00603.020A.1. and GN 00603.020D in this section.

The payee cannot deposit SSA benefits into a payee’s operating account, business account, or any other account that does not have Social Security approval.

b. Exception for State and local government agency payees

Refer to GN 00603.020D.2. in this section.

c. Deposits other than Social Security and SSI funds

We prefer the collective account contain only Social Security or SSI funds the individual or organizational payee receives.

However, organizations may establish an account, such as the Resident Trust Fund account, for the use of all their clients. For more information concerning RTF accounts, refer to GN 00603.020C.1. in this section.

For other accounts, the FO may approve an account containing both beneficiary and non-beneficiary money, if it has a correct title and the payee can adequately account for the funds owned by each beneficiary.

IMPORTANT: If a beneficiary has a representative payee, the individual or organization must be the designated representative payee for that beneficiary in order to receive the deposit of the beneficiary’s benefits. The individual or organization cannot receive a beneficiary’s benefits we have designated to another payee.

d. Federal Deposit Insurance Corporation (FDIC) insured funds

A properly titled collective account established at an FDIC-insured financial institution, usually a bank, provides each beneficiary in the collective account FDIC protection up to $250,000.  

Other financial institutions offer similar deposit protection. For the acceptable types of financial institutions, see GN 02402.030. You must make sure an account established at any type of financial institution adheres to all collective account policy so that each beneficiary’s funds in the account are insured.

The FDIC limit applies per financial institution. The payee should ensure that a beneficiary’s funds in the account do not exceed the FDIC insurance limit at one financial institution.

2. Collective account fees

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.

3. Interest earned on collective accounts

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

NOTE: In situations where the total interest paid on the collective account is minimal ($10 or less per quarter), we do not need a strict allocation of the interest. Use a reasonable method to allocate the interest, such as equally dividing the interest among all beneficiaries having a share in the account.

4. Collective accounts and transferring money

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

5. To and from the collective account

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.2.e. 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.2.c. 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. To and from other fiduciary accounts

A beneficiary’s funds should not accumulate in a collective account. If the payee has met the beneficiary’s current needs, does not anticipate any foreseeable beneficiary needs, and the remaining beneficiary’s funds exceed $500, the payee should transfer the funds from the collective account to a separate, correctly titled, interest-bearing account, or other investment, that is relatively risk free. The payee must document the transfer on the beneficiary’s account ledger as noted in the example in GN 00603.020B.2.d. in this section.

For more information about conserving benefits, see GN 00603.001.

If the payee is frequently transferring money between the collective account, an operating account, and other accounts, request documentation and an explanation. We do not allow a payee to borrow a beneficiary’s funds. We do not allow a payee to lend a beneficiary’s funds to anyone, as described in GN 00603.020B.1. in this section.

b. To and from operating accounts

For information on transfers between an operating account and a collective account, see GN 00603.020C.2.c. in this section.

F. Individual and organizational payee’s responsibilities include:

1. Following collective account policy

A payee must:

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

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

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

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

2. Reconciling beneficiary’s accounts

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

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

  2. accounting for all funds deposited into the collective account, and all withdraws 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. reconciling monthly any bank account containing beneficiary’s funds with the payee’s use of the funds; and

  4. keeping electronic or printed copies of the reconciliations.

3. Maintaining proper documentation

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

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

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

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

  4. 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 personal needs allowance (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.

G. Field Office responsibilities

Field Office (FO) management or staff designated by management is responsible for ensuring that the payee establishes the collective account in accordance with our policies and procedures as described in this section. You must review collective account documentation at least once every three years to ensure continued compliance with our policies and procedures. We use eRPS to establish and document approved collective accounts, as follows:

1. Establish the collective account in the precedent file

Use the eRPS collective account precedent file to document collective accounts. Enter and update approved collective accounts, as described in MS INTRANETERPS 018.001 through MS INTRANETERPS 018.007.

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.

EXAMPLE: Bruce Doe is a lawyer serving as an individual payee for 15 Social Security beneficiaries. His 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, 2013, 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 precedent file as described above. Use the initial approval date (10/13/13) to determine the expiration date. In this case, set the expiration date to 10/2016.

2. Review the collective account at least once every three years

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.

EXAMPLE: If the expiration date was 3/2014, set the expiration date to 03/2017. If the account is not in compliance, document facts and problems using the Make Note screen in eRPS. Review the issues with the payee and follow up with the payee in 90 days to verify the problems are resolved.

3. The collective account approval is expiring

You will receive an alert when the precedent file for a particular payee is expiring. eRPS sends the alert, “Review of collective account is required before expiration date” three months before the approval expires. You receive a second alert during the expiration month.

If you fail to review and approve the account, eRPS automatically deletes the payee’s collective account information from the precedent file during the following month.

This deletion causes two issues:

  • If the account no longer appears in the precedent file, 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 the precedent file. 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 09/2014 expiration date. In June 2014, you receive an alert to review the account. In September 2014, you receive the second alert. You do not review the account and eRPS automatically deletes it in October 2014. In January 2015, 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.

4. Expanded monitoring and the collective account

You may be required to conduct a site review, under the Expanded Monitoring Program, for a payee that has an approved collective account. We conduct some site reviews every four years, but we must review collective accounts every three years. For an overview of Expanded Monitoring, refer to GN 00605.400.

Before the site review, query the collective account precedent file, using 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 the precedent file. Use the review date as the basis for the next three-year interval.

EXAMPLE: You conduct a site review at Sunnydale Nursing Facility in February 2014. You query the collective account precedent file and find the approval expires in 14 months (04/2015). After the review, you determine the payee maintains the collective checking account in compliance with our policies and procedures. Use the site review date (02/2014) to calculate the new expiration date and reset it to 02/2017.

5. Deleting the collective account

Delete the payee from the collective account precedent file when they no longer serve as payee, or when they no longer maintain a collective account for beneficiaries.

H. Scenarios for applying collective account policy

The following organizational payee scenarios refer to the Manor Corporation and its nursing facilities, introduced in GN 00603.020D.3.a. in this section. Manor Corporation owns two community-based nursing facilities, Daisy Manor and Gentle Manor.

1. When nursing facilities are the organizational payees

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.g. in this section. Each nursing facility completes an annual accounting report for each of their beneficiaries.

You 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.

2. When a corporation is the organizational payee

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:

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.

3. When a corporation has a Resident Trust Fund (RTF) account

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 personal needs allowance (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. (Acceptable).

4. When a nursing facility has a Resident Trust Fund (RTF) account

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 her mother 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 she cannot deposit benefits entrusted to her 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.

5. When a third-party vendor is involved

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 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.


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0200603020
GN 00603.020 - Collective Checking and Savings Accounts Managed by Representative Payees - 02/16/2017
Batch run: 02/16/2017
Rev:02/16/2017