If your review of the dedicated account reveals that the payee knowingly misapplied funds for items or services not permitted, prepare an SSA-553, Special
Determination, see OS 15010.170. Your determination must include all relevant information
to explain your determination (e.g., names, SSNs, facts of the misapplication, and
basis of your determination).
NOTE: A signed SSA-552 (see SI 02101.200) or other statement from a representative payee certifying that the payee understood
the dedicated account restrictions can support a finding that a payee knowingly misapplied funds. However, the certification does not automatically establish misapplication
of funds. FO staff must consider any other relevant evidence, such as the nature and
amount of the expenditure, and the payee's explanation of why he or she believed the
expenditure was justified.
REMINDER: Misapplication is not the same as misuse.
If your review of the dedicated account indicates that the payee or individual recipient
in direct payment may have actually misused benefits, fully investigate for misuse
following GN 00604.020 through GN 00604.030.
If you determine that misuse occurred, take appropriate actions regarding misuse and
possible restitution. For information on misuse, see GN 00604.045 and GN 00604.050.
While a finding of misuse does not preclude a finding of misapplication, SSA will,
in the beneficiary’s interest, pursue the finding of misuse, in which case any recovered
funds go back into the dedicated account.