Any account that the payee uses to receive or hold a beneficiary’s funds must be titled to show the funds belong to the beneficiary and that the payee has only a fiduciary and not a personal interest in the funds. A fiduciary account is an account established by a person or entity (the representative payee) for the benefit of another party (the beneficiary). The fiduciary nature of the account must be disclosed in the financial institution’s deposit account records. Funds deposited by a fiduciary, on behalf of a beneficiary, are owned by the beneficiary. 

For more information on account titling, see “Account Titles” (GN 02402.050), “Direct Deposit for Representative Payee Cases” (GN 02402.055), “Collective Savings and Checking Accounts” (GN 00603.020), and “How to Title Accounts Managed by Representative Payees” (GN 00603.021).

To facilitate accounting and transfer of conserved funds when payee services cease, we prefer that payees hold conserved funds in a separate account. Follow GN 00603.055 for instructions on transferring conserved funds when a payee stops serving as payee.

As of September 2011, the U.S. Department of the Treasury allows the delivery of federal payments to RTFs held by nursing facilities. These accounts are also known as patient fund accounts and are limited to nursing facility usage only. These accounts pool federal benefits for residents:

• •

  who receive Social Security and/or SSI benefits, and the nursing facility is their representative payee;

• •

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

• •

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

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 if the account:

• •

  show the payee’s name in the RTF title (payee’s name Resident Trust Fund) (see GN 00603.021D and E);

• •

  is managed by the named payee; and

• •

  receives the full deposit of each beneficiary’s Social Security and SSI benefits.

IMPORTANT: If a beneficiary has a payee, the facility must be the payee to receive a beneficiary’s benefits. The facility cannot receive a beneficiary’s benefits that we designated to another payee.

We do not consider some RTFs collective accounts. This often occurs when a nursing facility has established an RTF for their residents, but they are not the payee that SSA selected to receive and manage funds. For examples of when an RTF is and is not considered an acceptable collective account, see GN 00603.020F.3. and GN 00603.020C.1. in this section.

Financial institutions use master-sub account configurations for various business purposes. Master-sub accounts involving payees require that the payee establish a separate checking or savings account, as a sub account, for each beneficiary or recipient. The title of the master and sub account must show:

• •

  the payee holds the account in a fiduciary capacity on behalf of the beneficiaries or recipients and

• •

  the beneficiaries or recipients own the account without having access to it.

Master-sub accounts involving payees are required to follow the same rules and requirements as a collective account covered in this section. The payee must:

• •

  contact SSA for guidance on how to set up the master-sub account before it is established;

• •

  maintain a system of ledgers for the master and sub accounts that show all transaction activities including deposits, withdrawals, and each sub-accounts remaining balance for each beneficiary; and

• •

  establish a separate, properly titled, checking or savings account, as a sub account, for each beneficiary or recipient.

Payees using SSA-approved master-sub accounts must have funds deposited into the master account, not the sub account, except in the situation described in GN 02402.050B.2.c.

FO management or staff designated by management must adhere to the collective account responsibilities outlined in GN 00603.020E, in this section, to ensure that the payee establishes the master-sub account properly.

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

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

The payee must establish the collective checking or savings account at an acceptable financial institution. For the acceptable types of financial institutions, see GN 02402.030.

To establish the collective account, the payee must:

1. a. 

   contact us before establishing a new collective account;

2. b. 

   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 00603.021 (for specific titling examples, refer to GN 00603.021D and E); 

   • •

     providing documentation showing the account title such as a bank statement; and

   • •

     obtaining SSA approval of the documentation and the collective account prior to using it.

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. 

IMPORTANT: Federal Deposit Insurance Corporation (FDIC) insurance will cover the beneficiary's funds that are in a properly titled collective account showing the beneficiary's ownership of the account. Additionally, beneficiaries' funds deposited into an improperly titled bank account often cannot be easily returned to SSA in cases of misuse. The payee should ensure that a beneficiary’s funds in the account do not exceed the FDIC insurance limit at one financial institution

In managing the collective account, the payee must:

1. a. 

   use the collective account to pay for the beneficiaries’ current and reasonably foreseeable needs, see GN 00602.001A

2. b. 

   deposit and manage the Social Security and SSI funds in the approved collective account, not in the operating account, business account, or any other account that SSA did not approve, as described in GN 00603.020C.3. in this section. The payee can deposit non-SSA funds into the collective account, only as described in GN 00603.020D.1 in this section; 

3. c. 

   not allow a beneficiary direct access to their own funds;

4. d. 

   not commingle beneficiaries' funds with the payee’s money, the organization’s money or any money belonging to the organization’s officers, directors or employees;

5. e. 

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

6. f. 

   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 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 and maintain documentation for Lily’s expenses. Manor Corp. must have access to Gentle Manor's ledgers to present to SSA when requested. 

The payee must account for all funds entrusted to them for each beneficiary by establishing and maintaining an accounting system. Each beneficiary associated with the collective account must have their deposits, expenditures, and transfers documented in the related account ledger.

For each beneficiary, the payee must:

1. a. 

   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. b. 

   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. c. 

   document the PNA, if applicable. A payee must 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 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. in this section; and 

4. d. 

   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. 

Any interest earned by the collective account belongs to the beneficiaries. The payee should prorate and credit interest to each individual beneficiary based on their share of funds in the account. 

The payee is responsible for keeping and providing upon request all documentation to show proper compliance with collective account policies and procedures, such as account statements, supporting records, and a complete and separate accounting of each beneficiary’s funds entrusted to the payee.

In addition, care facilities should maintain a petty cash log or account ledger for a beneficiary’s personal spending funds, also known as the 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.

Payees may have contracts with third-party vendors or use their own parent corporate office to handle client/resident fund accounts and provide accounting services. However, the payee (not the third party or corporate office) is responsible for: 

• •

  Contacting the FO before establishing and using a collective account;

• •

  Ensuring the FO approved the collective account prior to using it;

• •

  Providing us with a complete accounting of each beneficiary’s funds when requested, such as during a misuse investigation or at the time of a site review;

• •

  Determining the beneficiary’s needs and managing the use of funds to meet those needs; and

• •

  Timely submission of complete annual accounting reports and final accounting reports.

Although a vendor or corporate office handles the payee’s accounting, the payee cannot outsource its fiduciary responsibilities. Our relationship is with the payee. 

1. a. 

   Bank accounts must include the payee’s name in the fiduciary title, not the vendor’s or corporate office's name. 

2. b. 

   Our records (Form SSA-11-BK Request to be Selected as Payee), and the Electronic Representative Payee System (eRPS), must have the payee’s name on them, not the vendor’s or corporate office's name. 

3. c. 

   For corporate or third-party vendor RTF scenarios, refer to GN 00603.020F. 

Use eRPS to document collective accounts. Enter and update approved collective accounts, as described in MS 07418.001 and MS 07418.002. 

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. eRPS allows the expiration date of not less than 6 months or more than 3 years from the current date.

Finally, you establish the collective account in eRPS as described above. Use the initial approval date (10/13/24) to determine the expiration date. In this case, set the expiration date to 10/13/2027. 

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.

If the account is not in compliance, document facts and problems using the Make Note screen in eRPS under the Rep Payee Details. Review the issues with the payee and follow up with the payee in 90 days to verify the problems are resolved.

When the collective account for a payee is expiring, eRPS creates a work issue “Collective Account Recertification” three months before the expiration date in the Workload Management screen. eRPS creates a second recertification alert during the expiration month. This recertification can be viewed in eRPS under the Workload Management screen. Follow GN 00603.020E.2 for instructions on how to review the account for compliance and approval. 

If the FO fails to review and approve the account, eRPS automatically terminates the payee’s collective account information during the following month (30 days after expiration date).

The deletion causes two issues:

• •

  If the account is no longer active in eRPS, 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 eRPS. 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 payee, has an approved collective account with a 09/2024 expiration date. In June 2024, you receive an alert to review the account. In September 2024, you receive the second alert. You do not review the account and eRPS automatically deletes it in October 2024. In January 2025, the payee submits an accounting report indicating 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. 

A payee that has an approved collective account may be subject to a payee site review. Some payees receive a site review every four years, but we must review collective accounts every three years. For an overview of payee site reviews, refer to GN 00605.635. 

Before the site review, query the collective account in 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 eRPS. Use the review date as the basis for the next three-year interval. If the account is not in compliance, follow the instructions in GN 00603.020E.2. and GN 00603.020E.3. 

Terminate the collective account in eRPS when the payee no longer serves as payee, or when they no longer maintain a collective account for beneficiaries.

The nursing facilities, Gentle Manor and Daisy Manor, are the organizational 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 00603.020D.3 in this section. Each nursing facility completes an annual accounting report for each of their beneficiaries. 

The FO 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.

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 its 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:

• •

  for transfer example, refer to GN 00603.020D.3.d

• •

  for documentation policy, refer to GN 00603.020D.

• •

  for prepaid card policy, refer to GN 00603.020C.3.d. and 

• •

  for petty cash log example, refer to the last paragraph in GN 00603.020D.3. 

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.

Manor Corp. has an RTF account for residents at Gentle Manor and Daisy Manor, who do not have a payee. The account receives Social Security, SSI, and Veteran’s Affairs (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 an RTF account titled, “Daisy Manor Resident Trust Fund”, as described in GN 00603.020G.3. 

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 Manor Corp; and 

• •

  the payee must deposit the beneficiaries’ funds into an account that shows the payee is the fiduciary for the account (payee’s name for Social Security/SSI Beneficiaries). 

Manor Corp. cannot receive the deposits for any residents with for whom Daisy Manor is the payee because Manor Corp. is not the payee for those beneficiaries. However, Manor Corp. can receive the deposits for beneficiaries Manor Corp. serves as payee. 

For the following examples, Manor Corp. is the payee. It receives $950 for a beneficiary.

Daisy Manor has an RTF account for Social Security and SSI deposits of its residents who do not have a payee. The account also receives some of the residents' VA deposits. The title of the account is “Daisy Manor Resident Trust Fund”. 

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 Social Security or SSI deposits for the two residents who have individual payees. 

You must inform the payee that they cannot deposit benefits entrusted to them to an account she cannot manage or access. You must inform Daisy Manor that they are not the payee and cannot receive the funds. Remind the payee that they will have to account for the benefits she receives when she gets the annual accounting form. 

Atlas is a third-party vendor that handles accounting for Manor Corp. Atlas establishes an 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 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 payees other than Daisy Manor. Daisy Manor must establish a properly titled collective account and an account ledger for the 15 residents. Daisy Manor cannot accept the benefits for the two residents who have other payees. Atlas cannot accept benefits for the 17 residents who have payees. See the examples in GN 00603.020F.4. in this section. 

An exception allows certain parent or spouse payees to use their personal checking accounts if all of the following are true:

• •

  The payee is the spouse, natural/adoptive parent, or stepparent of the beneficiary;

• •

  The payee and the beneficiary live in the same household;

• •

  The payee requests direct deposit to the payee's personal checking account; and

• •

  The Field Office (FO) verifies with the payee that benefits will be used for the beneficiary's current expenses, and there will be no accumulation of funds in the account.

This exception applies for any category of Social Security or SSI benefits. The beneficiary does not need to be receiving benefits as a disabled/blind child or disabled adult child. The age of the “child” is not material. For additional information, see “Exception” in (GN 02402.055D).

IMPORTANT: Benefits should not accumulate in the spouse’s or parent’s checking account. The spouse or parent should conserve the accumulated benefits in a properly titled savings account. For more information on conserving benefits, see GN 00603.010.

We may allow an exception to the general account titling rule for payees that are agencies of a State or local government. The exception applies when the State or local government’s accounting structure sufficiently protects beneficiary interests and clearly identifies what funds belong to the beneficiary. 

An organization can operate using a DBA name. The organization name is the legal name. The DBA name is the business name of the organization or one of its entities. An organization can have multiple businesses and use different DBA names to identify them. The name of the payee must be the name in eRPS and the name on the collective account title.

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 the payee, Gentle Manor must manage the collective account. Gentle Manor’s name, not Manor Corporation’s name, must be the name in eRPS and the name on the collective account title.

When evaluating an organizational payee applicant, we consider whether the organization has custody of or is located in close proximity to the beneficiary. See GN 00502.130. Accordingly, we may appoint a subsidiary, local chapter, or branch office as payee rather than the parent organization. In these cases, the payee’s name, not the parent corporation’s name, must be part of the collective account title and must be in eRPS. Do not use the parent organization’s name unless the parent organization is the payee.

Using the Manor Corporation example in GN 00603.021E.1 in this section, the individual nursing facilities; Gentle Manor and Daisy Manor, would be the payees, not Manor Corporation. Each payee would have a collective 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 the beneficiaries it serves as payee into its collective account, and Daisy Manor receives the deposits for the beneficiaries it serves as payee into its collective account.

The following chart shows examples of acceptable and unacceptable collective account titles using Manor Corp. and Manor Corp. DBA Daisy Manor Nursing Facility. For information on a payee’s use of a Resident Trust Fund (also called a Resident Trust Account), see GN 00603.020.