You asked us to review whether a conflict exists between SSA law and a New York State
statute that applies to residential care facilities. One representative payee that
is also a residential care facility believes that the State statute requires it to
distribute personal needs allowance ("PNA")funds for a beneficiary's personal needs
or personal comfort items in one monthly lump sum. As explained below, we do not believe
that there is a conflict between SSA law and New York State law because the state
law should not be interpreted to prohibit the representative payee from supervising
and accounting for expenditures made from the PNA. Accordingly, we believe that the
representative payee can comply with its oversight and accounting obligations under
SSA's regulations and POMS without violating the state law. Should a representative
payee interpret the state law to prohibit the representative payee from meeting its
oversight and accounting obligations under SSA's regulations and POMS, then we believe
there would be a conflict with SSA law. Under such circumstances, the representative
payee must follow SSA law, which is supreme to state law under the United States Constitution.
The Flatbush FO conducted a payee review of a congregate care facility, Rockaway Manor,
in Rockaway, New York. The Rockaway Manor is an adult home and a Level II congregate
care facility. Upon review, it was noted that the beneficiaries residing in Rockaway
Manor received monthly PNAs of approximately $130. The facility contended under state
law that they were required to distribute the monthly PNA in one lump sum if the beneficiary
so requested. You note, however, that SSA policy requires the payee to manage these
funds and if necessary not "hand-over" the entire amount all at once.
SSA's regulations set out the following specific representative payee responsibilities:
Responsibilities of a representative payee.
A representative payee has a responsibility to-
(a) Use of the payments he or she received only for the use and benefit of the beneficiary
in a manner and for the purpose he or she determines, under the guidelines of this
subpart, to be in the best interests of the beneficiary;
(b) Notify us of any event that will affect the amount of benefits the beneficiary
receives or the right of the beneficiary to receive benefits;
(c) Submit to us, upon our request, a written report accounting for the benefits received;
(d) Notify us of any change in his or her circumstances that would affect performance
of the payee responsibilities; and
(e) In cases in which the beneficiary is an individual under age 18 (including cases
in which the beneficiary is an individual whose low birth weight is a contributing
factor material to our determination that the individual is disabled), ensure that
the beneficiary is and has been receiving treatment to the extent considered medically
necessary and available for the condition that was the basis for providing benefits.
20 CFR §§ 404.2035, 416.635.
SSA's regulations also require representative payees to act in the best interest of
the beneficiary by ensuring that the beneficiary's current maintenance is provided
Use of benefit payments.
(a) Current Maintenance. We will consider that payments we certify to a representative
payee have been used for the use and benefit of the beneficiary if they are used for
the beneficiary's current maintenance. Currentmaintenance includes costs incurred
in obtaining food, shelter, clothing, medical care and personal comfort items.
20 CFR §§ 404.2040(a), 416.640(a)(emphasis added).
When a beneficiary is institutionalized, SSA's policy is that the representative payee
must set aside a minimum of $30 per month ($360 per year) to be used for the beneficiary's
personal needs or saved on his behalf. POMS GN 00605.067D.3. Personal needs items include (but are not limited to):
Personal articles such as cosmetics, grooming aids, etc;
Room furnishings such as quilts, pictures, recliner, etc.;
Recreational items such as radios, musical instruments, televisions, bicycles, photo
albums, cassette player, etc;
Special medical expenses or equipment (i.e., not supplied by the care facility or
by State/Federal programs) such as hearing aids, eyeglasses, special wheelchairs,
Miscellaneous items such as movies, restaurant meals, candy, magazine subscriptions,
POMS GN 00605.067F.
The representative payee is not permitted to merely hand over the PNA to the beneficiary,
though. As set out in 20 C.F.R. § 416.635 above, the representative payee is responsible
for using the benefits in a manner and for the purpose that the payee determines to
be in the best interest of the beneficiary. The payee is also responsible for accounting
for the use of the benefits. Accordingly, the payee must maintain at least some oversight
over how the PNA is spent and be able to account to SSA for the use of the PNA.
New York Social Services Law ("NY Soc Serv")§131-o(1) provides that:
1. Each individual receiving family care, residential care or care in a school for
the mentally retarded, or enhanced residential care..., and who is receiving benefits
under the program of additional state payments pursuant to this chapter while receiving
such care, shall be entitled to a monthly personal allowance out of such benefits...
2. The personal allowance. . .shall be made directly available to the individual for
his own use in obtaining clothing, personal hygiene items, and other supplies and
services for his personal use not otherwise provided by the residential facility.
NY Soc Serv §131-o(2).
As a Level II congregate care facility, Rockaway Manor is subject to the requirements
of New York Social Services Law § 131-o.
As discussed above, Rockaway Manor reads § 131-o to require that it distribute the
beneficiaries' PNA in one lump sum if so requested. We understand that Rockaway Manor
does not exercise any oversight of the use of the benefits that it distributes as
a PNA and does not maintain any receipts or information to account for the use of
the benefits that it distributes in this manner. Apparently Rockaway Manor reads the
language in § 131-0(2) ("The [PNA]...shall be made directly available to the individual
for his own use...")to mean that the representative payee can exercise no supervision
or control over the PNA. Rockaway Manor's interpretation of § 131-0 clearly conflicts
with the representative payee's obligations under SSA's regulations.
We do not believe, however, that the state statute requires a lump sum distribution
upon request with no oversight of, or accounting for, the use of the benefits. The
purpose of the PNA under § 131-o is to ensure that beneficiaries have some funds to
pay for personal needs after paying for the cost of their institutional care. Accordingly,
we believe the above-quoted language in § 131-0(2) should not be read to absolutely
restrict the payee from exercising any oversight or control over the use of the PNA.
Rather, it restricts the PNA from being used to pay for the cost of the beneficiary's
We believe Rockaway Manor can comply with both SSA's representative payee requirements
and NY Soc. Serv. § 131-0 by overseeing the use of the beneficiaries' PNAs and ensuring
that they are used for personal needs or personal comfort items that are in the best
interest of the beneficiaries. The organizational payee should not allow the beneficiary
to "waste" the funds on expenses that are not in the beneficiary's best interests.
In order to prevent such waste from occurring, the representative payee may require
a beneficiary who is requesting a lump sum payment in an amount greater than would
be expected for the item he or she is purchasing, to reveal his or her intended use
of the funds prior to disbursement. When the representative payee considers the intended
use of the PNA to not be in the beneficiary's best interest, the representative payee
should not release the funds. This practice will permit the representative payee to
maintain oversight over the management of the beneficiary's money and to be able to
account for the expenditures in accordance with SSA policy.
If the representative payee insists that the state statute requires a lump sum distribution
of the PNA upon request, thereby prohibiting the representative payee from supervising
the expenditures and accounting for them, then we believe there would be an effective
conflict between federal and state law. Under the Supremacy Clause of the United States
Constitution, any state law that would interfere with or is contrary to federal law
will not stand. Courts have found implied conflict pre-emption where it is impossible
for a private party to comply with both state and federal requirements or where state
law stands as an obstacle to the accomplishment and execution of the full purposes
and objectives of Congress. See Beulah Johnson v. Brian J. Wing, et al., 12 F. Supp. 2d 311, 317 (S.D.N.Y. 1998); see also, Perez v. Campbell, 402 U.S. 637, 651-52 (1971). Rockaway Manor, thus, would have to follow SSA's representative
We believe there is no conflict between SSA law and New York Social Services Law §
131-o because we believe a representative payee can comply with its oversight and
accounting responsibilities under SSA's regulations without violating the state statute.
In the event that the representative payee interprets the state statute to require
a lump-sum distribution upon request with no oversight or accounting allowed, the
representative payee would violate its federal representative payee obligations. Federal
law is supreme to state law where there is a conflict. Accordingly, the representative
payee is required to comply with SSA regulations.
Assistant Regional Counsel