Current as of: January 2009 (a) In general
If the Commissioner of Social Security determines that the
interest of any qualified individual under this subchapter would be
served thereby, payment of the qualified individual's benefit under
this subchapter may be made, regardless of the legal competency or
incompetency of the qualified individual, either directly to the
qualified individual, or for his or her use and benefit, to another
person (the meaning of which term, for purposes of this section,
includes an organization) with respect to whom the requirements of
subsection (b) of this section have been met (in this section
referred to as the qualified individual's "representative payee").
If the Commissioner of Social Security determines that a
representative payee has misused any benefit paid to the
representative payee pursuant to this section, 405(j) of this
title, or section 1383(a)(2) of this title, the Commissioner of
Social Security shall promptly revoke the person's designation as
the qualified individual's representative payee under this
subsection, and shall make payment to an alternative representative
payee or, if the interest of the qualified individual under this
subchapter would be served thereby, to the qualified individual.
(b) Examination of fitness of prospective representative payee
(1) Any determination under subsection (a) of this section to pay
the benefits of a qualified individual to a representative payee
shall be made on the basis of -
(A) an investigation by the Commissioner of Social Security of
the person to serve as representative payee, which shall be
conducted in advance of the determination and shall, to the
extent practicable, include a face-to-face interview with the
person (or, in the case of an organization, a representative of
the organization); and
(B) adequate evidence that the arrangement is in the interest
of the qualified individual.
(2) As part of the investigation referred to in paragraph (1),
the Commissioner of Social Security shall -
(A) require the person being investigated to submit documented
proof of the identity of the person;
(B) in the case of a person who has a social security account
number issued for purposes of the program under subchapter II of
this chapter or an employer identification number issued for
purposes of the Internal Revenue Code of 1986, verify the number;
(C) determine whether the person has been convicted of a
violation of section 408, 1011, or 1383a of this title;
(D) obtain information concerning whether such person has been
convicted of any other offense under Federal or State law which
resulted in imprisonment for more than 1 year;
(E) obtain information concerning whether such person is a
person described in section 1004(a)(2) of this title; and
(F) determine whether payment of benefits to the person in the
capacity as representative payee has been revoked or terminated
pursuant to this section, section 405(j) of this title, or
section 1383(a)(2)(A)(iii) of this title by reason of misuse of
funds paid as benefits under this subchapter, subchapter II, or
XVI of this chapter, respectively.
(3) Notwithstanding the provisions of section 552a of title 5 or
any other provision of Federal or State law (other than section
6103 of the Internal Revenue Code of 1986 and section 1306(c) of
this title), the Commissioner shall furnish any Federal, State, or
local law enforcement officer, upon the written request of the
officer, with the current address, social security account number,
and photograph (if applicable) of any person investigated under
this subsection, if the officer furnishes the Commissioner with the
name of such person and such other identifying information as may
reasonably be required by the Commissioner to establish the unique
identity of such person, and notifies the Commissioner that -
(A) such person is described in section 1004(a)(2) of this
title,
(B) such person has information that is necessary for the
officer to conduct the officer's official duties, and
(C) the location or apprehension of such person is within the
officer's official duties.
(c) Requirement for maintaining lists of undesirable payees
The Commissioner of Social Security shall establish and maintain
lists which shall be updated periodically and which shall be in a
form that renders such lists available to the servicing offices of
the Social Security Administration. The lists shall consist of -
(1) the names and (if issued) social security account numbers
or employer identification numbers of all persons with respect to
whom, in the capacity of representative payee, the payment of
benefits has been revoked or terminated under this section,
section 405(j) of this title, or section 1383(a)(2)(A)(iii) of
this title by reason of misuse of funds paid as benefits under
this subchapter, subchapter II, or XVI of this chapter,
respectively; and
(2) the names and (if issued) social security account numbers
or employer identification numbers of all persons who have been
convicted of a violation of section 408, 1011, or 1383a of this
title.
(d) Persons ineligible to serve as representative payees
(1) In general
The benefits of a qualified individual may not be paid to any
other person pursuant to this section if -
(A) the person has been convicted of a violation of section
408, 1011, or 1383a of this title;
(B) except as provided in paragraph (2), payment of benefits
to the person in the capacity of representative payee has been
revoked or terminated under this section, section 405(j) of
this title, or section 1383(a)(2)(A)(ii) (!1) of this title by
reason of misuse of funds paid as benefits under this
subchapter, subchapter II, or subchapter XVI of this chapter,
respectively;
(C) except as provided in paragraph (2)(B), the person is a
creditor of the qualified individual and provides the qualified
individual with goods or services for consideration;
(D) such person has previously been convicted as described in
subsection (b)(2)(D) of this section, unless the Commissioner
determines that such payment would be appropriate
notwithstanding such conviction; or
(E) such person is a person described in section 1004(a)(2)
of this title.
(2) Exemptions
(A) The Commissioner of Social Security may prescribe
circumstances under which the Commissioner of Social Security may
grant an exemption from paragraph (1) to any person on a case-by-
case basis if the exemption is in the best interest of the
qualified individual whose benefits would be paid to the person
pursuant to this section.
(B) Paragraph (1)(C) shall not apply with respect to any person
who is a creditor referred to in such paragraph if the creditor
is -
(i) a relative of the qualified individual and the relative
resides in the same household as the qualified individual;
(ii) a legal guardian or legal representative of the
individual;
(iii) a facility that is licensed or certified as a care
facility under the law of the political jurisdiction in which
the qualified individual resides;
(iv) a person who is an administrator, owner, or employee of
a facility referred to in clause (iii), if the qualified
individual resides in the facility, and the payment to the
facility or the person is made only after the Commissioner of
Social Security has made a good faith effort to locate an
alternative representative payee to whom payment would serve
the best interests of the qualified individual; or
(v) a person who is determined by the Commissioner of Social
Security, on the basis of written findings and pursuant to
procedures prescribed by the Commissioner of Social Security,
to be acceptable to serve as a representative payee.
(C) The procedures referred to in subparagraph (B)(v) shall
require the person who will serve as representative payee to
establish, to the satisfaction of the Commissioner of Social
Security, that -
(i) the person poses no risk to the qualified individual;
(ii) the financial relationship of the person to the
qualified individual poses no substantial conflict of interest;
and
(iii) no other more suitable representative payee can be
found.
(e) Deferral of payment pending appointment of representative payee
(1) In general
Subject to paragraph (2), if the Commissioner of Social
Security makes a determination described in the first sentence of
subsection (a) of this section with respect to any qualified
individual's benefit and determines that direct payment of the
benefit to the qualified individual would cause substantial harm
to the qualified individual, the Commissioner of Social Security
may defer (in the case of initial entitlement) or suspend (in the
case of existing entitlement) direct payment of the benefit to
the qualified individual, until such time as the selection of a
representative payee is made pursuant to this section.
(2) Time limitation
(A) In general
Except as provided in subparagraph (B), any deferral or
suspension of direct payment of a benefit pursuant to paragraph
(1) shall be for a period of not more than 1 month.
(B) Exception in the case of incompetency
Subparagraph (A) shall not apply in any case in which the
qualified individual is, as of the date of the Commissioner of
Social Security's determination, legally incompetent under the
laws of the jurisdiction in which the individual resides.
(3) Payment of retroactive benefits
Payment of any benefits which are deferred or suspended pending
the selection of a representative payee shall be made to the
qualified individual or the representative payee as a single sum
or over such period of time as the Commissioner of Social
Security determines is in the best interest of the qualified
individual.
(f) Hearing
Any qualified individual who is dissatisfied with a determination
by the Commissioner of Social Security to make payment of the
qualified individual's benefit to a representative payee under
subsection (a) of this section or with the designation of a
particular person to serve as representative payee shall be
entitled to a hearing by the Commissioner of Social Security to the
same extent as is provided in section 1009(a) of this title, and to
judicial review of the Commissioner of Social Security's final
decision as is provided in section 1009(b) of this title.
(g) Notice requirements
(1) In general
In advance, to the extent practicable, of the payment of a
qualified individual's benefit to a representative payee under
subsection (a) of this section, the Commissioner of Social
Security shall provide written notice of the Commissioner's
initial determination to so make the payment. The notice shall be
provided to the qualified individual, except that, if the
qualified individual is legally incompetent, then the notice
shall be provided solely to the legal guardian or legal
representative of the qualified individual.
(2) Specific requirements
Any notice required by paragraph (1) shall be clearly written
in language that is easily understandable to the reader, shall
identify the person to be designated as the qualified
individual's representative payee, and shall explain to the
reader the right under subsection (f) of this section of the
qualified individual or of the qualified individual's legal
guardian or legal representative -
(A) to appeal a determination that a representative payee is
necessary for the qualified individual;
(B) to appeal the designation of a particular person to serve
as the representative payee of the qualified individual; and
(C) to review the evidence upon which the designation is
based and to submit additional evidence.
(h) Accountability monitoring
(1) In general
In any case where payment under this subchapter is made to a
person other than the qualified individual entitled to the
payment, the Commissioner of Social Security shall establish a
system of accountability monitoring under which the person shall
report not less often than annually with respect to the use of
the payments. The Commissioner of Social Security shall establish
and implement statistically valid procedures for reviewing the
reports in order to identify instances in which persons are not
properly using the payments.
(2) Special reports
Notwithstanding paragraph (1), the Commissioner of Social
Security may require a report at any time from any person
receiving payments on behalf of a qualified individual, if the
Commissioner of Social Security has reason to believe that the
person receiving the payments is misusing the payments.
(3) Authority to redirect delivery of benefit payments when a
representative payee fails to provide required accounting
In any case in which the person described in paragraph (1) or
(2) receiving benefit payments on behalf of a qualified
individual fails to submit a report required by the Commissioner
of Social Security under paragraph (1) or (2), the Commissioner
may, after furnishing notice to such person and the qualified
individual, require that such person appear in person at a United
States Government facility designated by the Social Security
Administration as serving the area in which the qualified
individual resides in order to receive such benefit payments.
(4) Maintaining lists of payees
The Commissioner of Social Security shall maintain lists which
shall be updated periodically of -
(A) the name, address, and (if issued) the social security
account number or employer identification number of each
representative payee who is receiving benefit payments pursuant
to this section, section 405(j) of this title, or section
1383(a)(2) of this title; and
(B) the name, address, and social security account number of
each individual for whom each representative payee is reported
to be providing services as representative payee pursuant to
this section, section 405(j) of this title, or section
1383(a)(2) of this title.
(5) Maintaining lists of agencies
The Commissioner of Social Security shall maintain lists, which
shall be updated periodically, of public agencies and community-
based nonprofit social service agencies which are qualified to
serve as representative payees pursuant to this section and which
are located in the jurisdiction in which any qualified individual
resides.
(i) Restitution
In any case where the negligent failure of the Commissioner of
Social Security to investigate or monitor a representative payee
results in misuse of benefits by the representative payee, the
Commissioner of Social Security shall make payment to the qualified
individual or the individual's alternative representative payee of
an amount equal to the misused benefits. In any case in which a
representative payee that -
(A) is not an individual; or
(B) is an individual who, for any month during a period when
misuse occurs, serves 15 or more individuals who are
beneficiaries under this subchapter, subchapter II of this
chapter, subchapter XVI of this chapter, or any combination of
such subchapters;
misuses all or part of an individual's benefit paid to such
representative payee, the Commissioner of Social Security shall pay
to the beneficiary or the beneficiary's alternative representative
payee an amount equal to the amount of such benefit so misused. The
provisions of this paragraph are subject to the limitations of
subsection (l)(2) of this section. The Commissioner of Social
Security shall make a good faith effort to obtain restitution from
the terminated representative payee.
(j) Misuse of benefits
For purposes of this subchapter, misuse of benefits by a
representative payee occurs in any case in which the representative
payee receives payment under this subchapter for the use and
benefit of another person under this subchapter and converts such
payment, or any part thereof, to a use other than for the use and
benefit of such person. The Commissioner of Social Security may
prescribe by regulation the meaning of the term "use and benefit"
for purposes of this subsection.
(k) Periodic onsite review
(1) In general
In addition to such other reviews of representative payees as
the Commissioner of Social Security may otherwise conduct, the
Commissioner may provide for the periodic onsite review of any
person or agency that receives the benefits payable under this
subchapter (alone or in combination with benefits payable under
subchapter II of this chapter or subchapter XVI of this chapter)
to another individual pursuant to the appointment of such person
or agency as a representative payee under this section, section
405(j) of this title, or section 1383(a)(2) of this title in any
case in which -
(A) the representative payee is a person who serves in that
capacity with respect to 15 or more such individuals; or
(B) the representative payee is an agency that serves in that
capacity with respect to 50 or more such individuals.
(2) Report
Within 120 days after the end of each fiscal year, the
Commissioner shall submit to the Committee on Ways and Means of
the House of Representatives and the Committee on Finance of the
Senate a report on the results of periodic onsite reviews
conducted during the fiscal year pursuant to paragraph (1) and of
any other reviews of representative payees conducted during such
fiscal year in connection with benefits under this subchapter.
Each such report shall describe in detail all problems identified
in such reviews and any corrective action taken or planned to be
taken to correct such problems, and shall include -
(A) the number of such reviews;
(B) the results of such reviews;
(C) the number of cases in which the representative payee was
changed and why;
(D) the number of cases involving the exercise of expedited,
targeted oversight of the representative payee by the
Commissioner conducted upon receipt of an allegation of misuse
of funds, failure to pay a vendor, or a similar irregularity;
(E) the number of cases discovered in which there was a
misuse of funds;
(F) how any such cases of misuse of funds were dealt with by
the Commissioner;
(G) the final disposition of such cases of misuse of funds,
including any criminal penalties imposed; and
(H) such other information as the Commissioner deems
appropriate.
(l) Liability for misused amounts
(1) In general
If the Commissioner of Social Security or a court of competent
jurisdiction determines that a representative payee that is not a
Federal, State, or local government agency has misused all or
part of a qualified individual's benefit that was paid to such
representative payee under this section, the representative payee
shall be liable for the amount misused, and such amount (to the
extent not repaid by the representative payee) shall be treated
as an overpayment of benefits under this subchapter to the
representative payee for all purposes of this chapter and related
laws pertaining to the recovery of such overpayments. Subject to
paragraph (2), upon recovering all or any part of such amount,
the Commissioner shall make payment of an amount equal to the
recovered amount to such qualified individual or such qualified
individual's alternative representative payee.
(2) Limitation
The total of the amount paid to such individual or such
individual's alternative representative payee under paragraph (1)
and the amount paid under subsection (i) of this section may not
exceed the total benefit amount misused by the representative
payee with respect to such individual.Legislative History ________________________________________________________________________
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