Operations

Representative Payee Accounts: Know the Rules

Verify that the beneficiary is in the credit union’s field of membership.

October 19, 2010
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Establishing the account

A representative payee isn’t required to open an account at a financial institution for the beneficiary, but the SSA encourages doing so.

The first step in opening a representative payee account is to verify that the beneficiary is in the credit union’s field of membership.

Remember, the beneficiary, not the representative payee, owns the SSA benefits funds.

The representative payee serves in the capacity of “manager” of the account, not the owner, so base membership eligibility on the beneficiary.

Make sure the account is set up in your system so the beneficiary is listed as the only owner. Neither the representative payee nor a third party can have ownership interest in the account.

On the other hand, while the beneficiary retains ownership interest, the account title shouldn’t permit the beneficiary to have direct access to the funds in the account.

Here are two recommended titles:

  • “(Beneficiary’s name) by (representative payee’s name), Representative Payee.”
  • “(Representative payee’s name), Representative Payee for (beneficiary’s name).”

Because the beneficiary owns the funds in a representative payee account, use the beneficiary’s tax identification number on the account for reporting purposes.

Next: Requests for information

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