Identification Number:
PR 07230 TN 8
Intended Audience:See Transmittal Sheet
Originating Office:ORDP OISP
Title:Conserved Funds
Type:POMS Full Transmittals
Program:All Programs
Link To Reference:


Part PR – Title II Regional Chief Counsel Precedents

Chapter 072 – REPRESENTATIVE PAYMENT - Use and Conservation of Benefits

Subchapter 30 – Conserved Funds

Transmittal No. 8, 03/14/2023


Originating Component


Effective Date

Upon Receipt


Updates to GN 00602.010 were published on 2/17/2023. These updates provide additional guidance on personal needs allowances, personal needs expenditures, and discretionary spending money for institutionalized beneficiaries. PR 09-066 Niagara Lutheran Home PNA and Cost of Care DEBT undermines the changes made to GN 00602.010 because it states that there is no legal requirement to provide a PNA to Title 2 Beneficiaries, so we are removing it from PR 07230.035.

Summary of Changes

PR 07230.035 New York

Subsection A: Removing this section because it undermines the policy in GN 00602.010. The expectation is that institutionalized Title 2 Beneficiaries should receive $30 for PNA.

PR 07230.035 New York

A. PR 09-066 Niagara Lutheran Home PNA and Cost of Care DEBT

DATE: March 5, 2009

Opinion PR 09-066 Niagra Lutheran Home PNA and Cost of Care DEBT has been archived because the law that was its basis has been superceded.

B. PR 05-211 Re: Representative Payee Commingling of Beneficiaries' Personal Funds With Operating Funds

DATE: August 3, 2005


A representative payee may not commingle beneficiaries' personal allowance funds and operating funds for a residential facility in the same account.


You asked us to review whether Herkimer DDS, which has been appointed a representative payee, may commingle funds with its operating funds for a residential facility. We conclude that the representative payee may not commingle personal allowance funds and operating funds for a residential facility in the same account.


The Utica Field Office contacted the volume payee Herkimer County DDS ("Herkimer") regarding the collective account it maintains for SSA beneficiaries. The account is commingled with the operating account. You note that for SSA this is not acceptable. You also note that Herkimer submitted a section of the NYS Fiscal Reference Manual ("Manual") (Accounting Principals), which they believe allows such an action. Specifically, Herkimer cited to section TA53, the Social Services Trust Account section of the New York State Federal Reference Manual. According to TA53, a Social Services Trust account "may be broken down into sub-accounts for recoveries, burial funds, representative payee accounts for adults, protective payee accounts for adults, representative payee account for foster care children, adult conservatorships, etc." You also note that Herkimer has segregated the funds of the beneficiaries in the operating account and the ledgers of the SSA beneficiaries are perfect. You further note, however, that the beneficiaries' funds are mixed with the operating account.


1. SSA Regulations & POMS

The SSA Regulations state that conserved funds should be invested in accordance with the rules followed by trustees and that any investment must show clearly that the payee holds the property in trust for the beneficiary. 20 C.F.R.§§404.2045(a) and 416.645(a). The POMS provide that "Generally a beneficiary's funds must not be commingled with the payee's personal or organizational operating funds." POMS GN 00603.010. The only exceptions are for spousal or parental payee ships, which don't apply here. Furthermore, a collective account must be properly titled to show the beneficiaries as owners of the account and any interest earned belongs to the beneficiaries. POMS GN 00603.020B.

2. State Law

New York law provides:

Whenever a resident authorizes an operator of a facility to exercise control over his or her personal allowance such authorization shall be in writing and subscribed by the parties to be charged. Any such money shall not be mingled with the funds or become an asset of the facility or the person receiving the same, but shall be segregated and recorded on the facility's financial records as independent accounts.

NY Soc. Serv. §131-o(2).

Further, New York law states:

Personal allowance accounts and accounts for other resident funds shall be kept separate and distinct from each other and from other account(s).

N.Y. Soc. Serv. §487.6(4).

New York law also prohibits operating facilities from using any portion of resident funds to compensate themselves for services provided. The statute states:

The operator shall hold resident funds in custody for the sole use of the resident and shall not use these funds for any other purpose.

N.Y. Soc. Serv. §487(c)(3).

Additionally, New York law provides that any interest on money received and held for a resident by a representative payee is the property of the individual resident. The statute provides:

An assisted living operator or employee of a residence or any other entity which is a representative payee of a resident of such residence pursuant to designation by the social security administration or which otherwise assumes management responsibility over the funds of a resident shall maintain such funds in a fiduciary capacity to the resident. Any interest on money received and held for the resident shall be the property of the individual resident.

New York Public Health Law §4661.

In accordance with the plain language of the aforementioned regulations, POMS, and statutes, we opine that operating facilities must maintain separate accounts for their residents' personal funds and their own operating funds. Although we do not have any information regarding the titling of the account, we do not see how the titling of an operating account could show clearly that the funds in that account are held in trust for the beneficiaries. Also, if the account is an interest bearing account, which it should be, we have no information to show that the interest on the account is distributed to each beneficiary in an appropriate proportionate share. Additionally, we do not see anywhere in section TA53 of the New York State Fiscal Reference Manual authorization to commingle trust account funds with a facility's operating funds. To the extent that Herkimer DDS interprets TA53 to conflict with SSA requirements, we take the position that SSA requirements must be followed. 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). Herkimer County DDS, thus, would have to follow SSA's beneficiary fund requirements. The practice of earmarking and segregating beneficiary funds and operating monies in a single operating account is not sufficient protection for conserved beneficiary funds and should not be permitted.


We conclude that a representative payee may not commingle personal allowance funds and operating funds for a residential facility in the same account.

Barbara L. S~


Kristina C~

Assistant Regional Counsel

PR 07230 TN 8 - Conserved Funds - 3/14/2023