When a beneficiary resides in an institution, the payee should allot a reasonable
share of benefits for the institution's customary charges. The payee should consider
an institution's customary charges and the beneficiary's other current needs. The
payee should allocate at least $30 per month for the PNA. If a payee does not manage
funds in the best interests of the beneficiary, SSA must consider suitability.
A payee should not pay an amount for customary charges in excess of the legal maximum
charges established by individual State law. The Regional Office (RO) should discuss
questionable charges with State administrators who have oversight of institutions.
Generally, the legal maximum charge relates to the cost of operation. Do not assume
there is one rate for all beneficiaries. Rates can vary, depending on the State:
Charges may vary between beneficiaries receiving or not receiving some form of public
Some States set the charges for beneficiaries in institutions serving individuals
with intellectual disorders considerably lower than for beneficiaries in state mental
hospitals serving individuals with mental disorders.
Some States do not charge for care of certain types of beneficiaries, for example,
children with intellectual disorders.
States often adjust rates for beneficiaries who do not have sufficient income or resources
to cover the charges set by State law. States often consider more than one factor
to arrive at an adjusted rate. The beneficiary's income is always an important consideration.
Methods used to arrive at an adjusted rate can vary, depending on the State:
In some States, the institution makes an agreement with the beneficiary, or the beneficiary's
representative, stating the amount the beneficiary will pay.
In some States, the State determines the charge by a rate schedule based on individual
or family income.
The difference between the legal maximum charge and the amount institutions collect
varies, depending on the State:
The beneficiary pays the adjusted rate, and the State waives, or "forgives" immediately,
the difference between that amount and the legal maximum charge. The beneficiary is
not legally liable beyond the amount agreed upon;
The beneficiary is liable for the full amount of the legal maximum charge indefinitely,
as an unpaid debt owed the State. In such a State, if a beneficiary ever inherits
money or has some windfall, State law obligates the beneficiary to pay the unpaid
The State removes the beneficiary's legal liability for the remaining charges after
a certain number of years.
Institutions may set a standard allocation for each beneficiary's current needs. However,
allocations may vary, depending on the institution:
Institutions that do not have a standard allocation usually have a maximum amount
that may be spent during an established period; for example, weekly, monthly, etc.
In some institutions where there is no standard allocation, the social service staff
in combination with the medical staff determine the level of spending for each beneficiary.
Some institutions may use a fixed procedure or individualized spending plan, which
permits beneficiary withdrawals or expenditures as long as funds are available.
Payees should not use benefits to purchase items normally provided by the facility
or covered under a State or Federal program. If the payee used SSA funds to purchase
these items, the payee must apply for funding from the programs that normally provide
such items and reimburse the beneficiary’s account upon receipt of the funds and provide
proof to SSA.
If the care-providing facility complains that the payee is not contributing toward
the cost of care, contact the payee for an explanation. If the payee's handling of
charges is improper use of benefits or adversely affects the beneficiary, consider
a change of payee action and evaluate the payee's continued suitability. Develop fully
and follow the rules for payee selection (see GN 00504.100).