TN 41 (10-11)
GN 02402.050 Account Titles
A. Description of master-sub accounts
A master-sub account is an account at a financial institution (FI) established to receive deposits on behalf of a group of individuals. Sub-accounts are then set up at the same FI, another FI, or on the individual ledgers maintained by the master account holder. The FI maintains and disseminates payment transaction information to the master account holder. For the requirements that the individual must meet, in order to approve direct deposit of benefits to a master account, see GN 02402.050B.2. in this section and GN 02402.055, for representative payee situations.
NOTE: There is a change in policy for master-sub accounts. A master-sub account is now 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 the U.S. Department of the Treasury (as explained in GN 02402.030B.1.).
EXAMPLE 1 (Acceptable Account): Comfort Nursing Home maintains a master-sub account titled “Comfort Nursing Home Patients' Accounts” at New State Bank for the convenience of its residents. The nursing home sets up a separate sub-account for 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 for personal expenses. The nursing home keeps track of all deposits and withdrawals.
EXAMPLE 2 (Acceptable Account): A religious order whose members take a vow of poverty maintains an account in its name at Trustworthy Bank. In the monthly statement, Trustworthy lists all funds transferred into the account, giving the name and SSN of the recipient, as well as the amount and the date. The Treasurer of the order keeps a separate record for each member's sub-account, showing how much money the member received and spent, and the balance remaining in the account.
EXAMPLE 3 (Acceptable Account): Happy Valley Nursing Home residents can have their payments directly deposited to a master-sub account set up by Atlas Funds Management Co., which manages nursing home residents funds. Atlas sets up the account at an FI. Atlas sets up a patient resident account in the name of Happy Valley Nursing Home at a FI. Atlas keeps a record of deposits, withdrawals, earned interests, and gives each resident a quarterly account statement.
EXAMPLE 4 (Unacceptable Account): Security Check Cashing Service sets up a master account at All-sure Bank, and advertises that it can now offer direct deposit to its customers. A separate sub account is set up 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. A master account established for a check cashing service is not one of the categories for acceptable direct deposit.
B. Policy for account titles
The individual's ownership interest in the account must show in the account title or the sub-account title. In a master-sub account situation, the sub-account may be either a checking or savings account.
1. Single or joint accounts
Beneficiaries who are their own payees may have his or her payments deposited to a single or joint ownership account. Joint accounts for SSI recipients may create resource-counting issues. (See SI 01140.205.)
2. Master-sub accounts
A title II or title XVI beneficiary who is his or her own payee may have benefits deposited to an acceptable master account, as noted in GN 02402.050A in this section, if they also meet the following conditions:
The beneficiary’s master-sub account benefits must come by direct deposit to a bank, savings and loan association, credit union, or thrift institution.
The beneficiary must have a sub-account in his or her name maintained by the master account holder; e.g., the nursing home, investment company, or the religious order, where the members take a vow of poverty.
The master account holder must keep sub-account records for each participant. The sub-account records must show all money received and withdrawn, and the remaining balance in the sub-account for each participant. This information must be available to the participant upon request.
The arrangement is voluntary on the part of the beneficiary.
The beneficiary has the right to terminate the arrangement.
NOTE: Once an account is determined to be acceptable, direct the account holder to the financial institution for their specific account questions.
A representative payee may have a title II or title XVI beneficiary's payments deposited to a master account if they meet the following conditions:
The master account is at a bank, savings and loan association, credit union, or thrift institution.
The beneficiary has a sub-account that meets the conditions of GN 02402.055.
The representative payee maintains separate sub account records for each beneficiary. For each beneficiary, the sub-account record must show all money received and withdrawn, and the balance remaining in the sub-account.
The arrangement is voluntary on the part of the beneficiary's representative payee.
The representative payee has the right to terminate the arrangement.
In a master-sub account arrangement, you must consider only the amount in a title XVI recipient's own sub-account, in determining the value of the recipient's resources. Treat the other sub-accounts as separate accounts. However, sub-accounts not belonging to the title XVI recipient count in determining the recipient's income and resources, if the owner is included in the deeming process for the recipient. Because we treat each sub-account as a separate account, we may send payments for beneficiaries with representative payees by direct deposit, to the same master account as those of other beneficiaries. For details on direct deposits for representative payee cases, see GN 02402.055.