Social Security

Under legislation intended to strengthen the Social Security Administration's (SSA) representative payee program, a three-year program has been established to allow SSA-approved nonprofit groups to collect a fee from SSA beneficiaries for providing representative payee services. SSA appoints representative payees for about 5 million beneficiaries who cannot manage their own finances because of their youth or mental or physical impairments. Payees receive the benefits directly from SSA and must use them only for the beneficiaries' needs. While most payees are relatives of the beneficiaries, others may be court-appointed guardians or various public and private social service agencies. The representative payee fee program has been operating for only a short time, and its effectiveness remains to be seen. This report discusses the advantages and disadvantages of such a fee.

GAO found that the majority of the organizations participating in the representative payee program: (1) believed that the fee program would encourage organizations to become payees and existing payees to take more Social Security clients, but also might attract for-profit organizations; (2) had difficulty finding payees for certain beneficiaries, especially mentally ill, homeless, and substance-abusing persons; (3) were being reimbursed less than the maximum fee for their services because beneficiaries were unable to afford the fee; and (4) suggested that the cost reimbursement for services be paid by some source other than the beneficiaries and that the fee program should be permanent and open to less-established organizations.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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