Effective Dates: 01/29/1996 - Present Previous | Next

TN 5 (11-93)

GN 00608.044 Evaluation of SSA 7161-OCR-SM — Item 8-Conduit Payee Information

A. INTRODUCTION

The existence of a conduit payee may indicate a lack of interest in the beneficiary or may suggest that the beneficiary should be receiving his/her own benefits directly.

B. DEFINITION

A conduit payee is a payee who merely signs the check and turns it over to the beneficiary or other person or who cashes the check and turns the full amount over to the beneficiary or other person. These payees do not exercise control over the funds and cannot accurately account for how the funds are spent.

C. PROCEDURE

If the response to item 8 is “YES,” develop to determine if a new payee is needed or if the beneficiary is capable of receiving direct payment. See GN 00502.055 for information about the beneficiary handling his/her own benefits.

EXCEPTION: Do not develop if the representative payee is a legal guardian who does not have custody and the benefits are turned over to the custodian (other than the beneficiary). For example, do not develop if the custody code shows NPM (Nonprofit Mental Institution) and the benefits are turned over to the institution.

D. EXAMPLES

The following are examples of determinations of whether a payee is a conduit payee.

1. Payee is a Conduit Payee

The payee indicates that he receives his mother's benefits. He cashes the checks and turns the full amount over to the nursing home (his mother's custodian). The nursing home takes care of all his mother's needs and gives her $10 a week for personal spending.

The payee is acting as a conduit for the nursing home. He is not exercising control over the funds, cannot accurately account for their use and is in no way verifying that the nursing home is providing for his mother's needs. Development is necessary to question the use of the benefits and determine whether a change of payee is needed.

2. Payee is Not a Conduit Payee

The payee indicates that he receives his mother's benefits. He cashes the checks and pays the nursing home the entire amount to cover the home's fee for the care of his mother. He buys her clothing and gives her $40 per month for personal needs from other income.

The payee is not acting as a conduit. He is exercising control over the benefits in the best interest of the beneficiary.

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GN 00608.044 - Evaluation of SSA 7161-OCR-SM — Item 8-Conduit Payee Information - 01/29/1996
Batch run: 10/17/2018
Rev:01/29/1996