RepresentativePayment, Guardianship &

Conservatorship

Ray CebulaApril 2011

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Representative Payment Introduction

• The Representative Payment Program, 20 CFR 404.2001, et seq., and 416.601, et seq., provides for payment of social security disability insurance (SSDI) and/or supplemental security income (SSI) benefits to a person other than the recipient.

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Who Needs a Payee

• The Social Security Act and SSA policy recognize that all recipients have the right to manage their own payments. However, there are two groups of exceptions to this policy:

– recipients who must have a payee, and

– recipients who have been determined to need the services of a payee.

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Who Must Have a Payee

• 2 categories of recipients must have a payee:

Children under the age of 18,20 CFR 404.2010(b), 416.610(b), and

Recipients determined to be legally incompetent, 20 CFR 404.2010(a)(1), 416.610(a)(1).

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Who Must Have a Payee

• A special note about disabled individuals who continue to be active substance abusers. As DAA is not an allowable disability, the “requirement” that substance abusers have a payee has been repealed. However, if active abuse is continuing, SSA may find there is need for a payee.

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Who Has Been Individually Determined to Need a Payee

• A payee will be appointed to manage benefits if SSA determines that a particular recipient is mentally or physically unable to manage, or direct the management, of benefit payments in his/her best interest. 20 CFR 404.2001(b), 416.601(b).

• This determination is considered a capability decision, NOT a legal competency determination.

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Capability Determinations

• The inability to manage payments must be determined before a payee can be appointed.

• Information in the form of legal evidence, medical evidence and lay evidence may form the basis for the determination that the person is not capable of managing his or her payments.

• This determination is an initial determination and can be appealed unless the recipient is required to have a payee. 20 CFR 404.902(o), 416.1402(d).

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Selection of a Payee

• The selection of a payee must focus on the person, or entity, that will best serve the recipient’s interests.

20 CFR 404.2020, 416.620

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Selection of a Payee

• SSA must consider:– the relationship of the nominated payee

to the recipient,– the amount of interest shown in the

recipient,– any legal authority over the recipient,– custodial relationship to the recipient,– nominated payee has knowledge of and

can look after the recipient’s needs.

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Regulatory Preference Order

• 20 CFR 404.2021(a), 416.621(a) provides a preference list for recipients 18 and older:– spouse, legal guardian– friend with custody or strong concern,– public or nonprofit agency w/ custody,– private, for profit, agency w/ custody,– members of community groups/volunteers.

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Who Cannot be a Payee

• SSA cannot appoint a recipient’s creditor as payee unless:– the nominated payee is a relative living in

the recipient’s household,– the legal guardian is a facility licensed

under state/local law,– the legal guardian is an employee, owner,

or administrator of the facility of residence.

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Who Cannot be a Payee

Exceptions:

– SSA has made a good faith effort to find an alternative payee, or

– SSA has made a written determination that the nominated payee poses no risk, there is no substantial conflict of interest, and that no other suitable payee exists.

POMS GN 00502.113

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Who Cannot be a Payee

• The Social Security Protection Act of 2004 disqualifies any individual convicted of offenses resulting in imprisonment for more than 1 year, or those fleeing prosecution, custody or confinement, from being appointed as a payee.

20 CFR 404.2022, 20 CFR 416.622

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Payee Responsibilities• A properly appointed payee “steps into the shoes of”

the recipient.• A payee must:

– Use payments for the use and benefit of the recipient,

– Report any changes that may impact upon the recipient’s payment level,

– Submit written accountings and reports to SSA,– Accept potential financial liability for misused

funds.

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The Use of Payments

• 20 CFR 404.2040, 416.640 will control the use of payments received by a payee.

• Current maintenance – shelter, food, clothing, utilities, medical care (not paid for by Medicare or Medicaid) and personal comfort items.

• SSDI may be used to support dependents after the needs of the recipient have been met.

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The Use of Payments

• Claims of creditors arising before the payee was appointed need not be met using current benefits.

• A payee may use current benefits for “past debt” only if the current and reasonably foreseeable needs of the recipient have been met.

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The Use of Payments

• Conservation of funds – Funds remaining after current needs have been met must be conserved for future need. Savings bonds, and insured, interest bearing savings accounts are the preferred methods of conservation. 20 CFR 404.2045(b), 416.645(b)

• Any savings account, etc., held for an SSI recipient must comply with income and resource provisions of the SSI program.

Representative Payment

• A Representative Payee’s appointment will generally end when the individual beneficiary is terminated from the disability programs and/or is ineligible to receive cash payments.

• SSA does have procedures for removal of a Representative Payee in cases of misuse or in instances when the beneficiary becomes able to manage their own benefits.

The CWIC & the Rep Payee

• CWICs can and should be encouraged to work with a Representative Payee during a beneficiary’s return to work planning.

• It is critical that the Representative Payee understand the implications of work activity and earned income on benefits.

• Though a beneficiary may choose to have their payee manage their wages, SSA’s authority only extends to the benefits.

• The CWIC should explain to the beneficiary that expenses must still be met with earnings as cash benefits decrease or are eliminated completely.

Payee accounting

• The SSA is charged with monitoring to insure payees use benefits for the beneficiary’s needs.

• Individual payees must provide annual accounting.

• Organizational payees provide accounting and receive infrequent random on-site reviews if they serve fewer than 50 beneficiaries.

• Larger organizational payees are reviewed by SSA field staff once every 3 years

If there are problems:

• A beneficiary may ask someone else to apply to be payee, or may apply to be his or her own payee

• A payee may be found “unsuitable” if payee is not meeting beneficiary’s basic needs, if using the money for someone other than the beneficiary, or if simply handing the funds over to the beneficiary.

• Note that SSA’s payee monitoring authority does not extend beyond SSA paid benefits.

P & A employer payee reviews

• Since December, 2009, P&A (PABSS) grantees are assisting SSA to monitor organizational payees that employ beneficiaries

• Conducting onsite visits of housing and employment sites for health and safety issues

• Interviewing payees and beneficiaries

• Reporting findings to SSA via NDRN.

• To reviews of broader pool organizational payees

• Only small percentage will be employers

• Will interview beneficiaries and payees

• Will visit housing if provided by payee

• These reviews augment payee monitoring completed by SSA staff

Changing this month…

Payee issues

• If you encounter situations where an individual or organizational payee is improperly using benefits, not taking care of food, housing and medical needs, or abusing the beneficiary, please contact the P & A in your state. PABSS grantees receive additional grant funding to investigate some payee issues.

Guardianship

• Guardianship is controlled by state statute. As a result, there will be state variances in process and regulation of actions. A state by state information listing can be found at:

• http://www.brycs.org/documents/upload/state_guardianship_info.pdf

• A Guardianship is appointed by a Court to manage both the “person” and the “estate” of an individual, the “ward”, determined to be legally incompetent by that court.

• The state Court involved is generally the Family or Probate Court.

Guardianship

• A guardian of the person with mental retardation may be appropriate to oversee his or her personal affairs as well as financial affairs.

• The appointment of a guardian is a serious step as it places another in complete control of the ward’s life.

Guardianship• The disability , or medical condition, must cause the ward

to be incapable of managing or directing management of his/her financial and personal affairs.

• The disability can be caused by:• Mental deterioration,• Physical incapacity,• Mental illness,• Developmental disability,• Clearly this is not an inclusive list! Having a disability is

NOT sufficient grounds to warrant a Guardianship. The individual must be incompetent to manage his/her affairs.

Guardianship

• The Guardian assumes all of the rights and responsibilities of the incompetent individual and is able to make decisions about many aspects of daily life but must make these decisions in the “best interest” of the ward.

• The Guardian MUST be appointed by the appropriate state Court after a determination of legal incompetency is made for this purpose.

Guardianship• State Courts can appoint Guardians to control every aspect of an

individual’s life, however Guardianships should be “tailored” to meet the needs of each individual and should not limit the individual from controlling those aspects of life that they are capable of controlling.

• Guardianships should not be broader than absolutely necessary.• The Guardian may be appointed to handle: Medical treatment Property (real & personal)

Living situations Income & assets Marriage Financial decisions Personal decisionsOr ALL of the above, depending upon the totality of circumstances.

Guardianship• A Guardian can be appointed on a temporary basis and

allowed very specific authority and duties in the case of emergency. The immediate needs and welfare of the Ward MUST be of primary concern in this type of case.

• Temporary Guardians can be appointed to:Access & release confidential recordsMake decisions concerning education or counselingDetermine a place of residenceMaking healthcare decisionsManaging real and/or personal property

Guardianship

• The Court should appoint the individual who plays a significant role in the individual’s life. The Guardian should be award of and sensitive to the needs of the individual and should understand the preferences of the individual.

• Generally, the legal standard is one of “clear and convincing evidence” of the need for Guardianship.

Guardianship

• A Guardianship will terminate upon the death of the Ward.

• However, each state Court system will have procedures for the removal and/or replacement of a Guardian prior to the death of the Ward.

The CWIC & the Guardian

• When a Guardian has been appointed for an individual, the CWIC MUST be in contact with the Guardian during the return to work planning process.

• The Guardian may have the authority to prevent any work attempt by the individual Ward.

• The CWIC should request copies of Guardianship documents in order to determine the authority of the Guardian in each instance and consult with PABSS if needed.

• ANY legal disputes between the Guardian and Ward MUST be referred to another entity for resolution or representation.

Conservatorship

• Conservatorship is a legal process that determines whether the proposed “ward” is legally competent to manage his/her affairs and/or funds.

• Conservatorship is “of the estate”.• A conservator MUST be appointed by the

Probate/Family Court.

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Conservatorship

• An example: An adult with mental retardation may be in need of a conservator of the estate to manage his or her financial affairs.

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Conservatorship

• The Probate/Family Court has sole jurisdiction and “shall assign only the duties and authority that are the least restrictive means of intervention necessary to meet the needs of the ward.

• A Conservator can be appointed temporarily, i.e., during a period of hospitalization and recovery.

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Conservatorship

• While voluntary conservatorship can occur most situation are involuntary and will require representation of the proposed ward and a full hearing before the Probate/Family Court.

• The standard is “clear and convincing” evidence of the need for intervention.

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Who Can be Appointed?

• The Court must consider:• The extent of knowledge of the person’s

preferences regarding care or management,• The ability to carry out duties,• The costs to the estate,• The commitment to welfare and independence,

and• Any existing conflicts.

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Duties of Conservator

• The conservator is responsible for supervising the financial affairs of the person as ordered by the Court.

• The conservator shall use the least restrictive means of intervention in the exercise of duties and authority.

• Inventory • Reports and periodic accountings to Court.

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Specific Authority Required by Court

The Court provides for specific authority for a Conservator to:

• Place the ward in an institution for long term care,• Change the ward’s address,• Dispose of household goods,• Sell, mortgage or transfer real estate,• Apportion a % to the ward’s spouse• Consent to psychiatric medication.

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Termination of Conservatorship

• Most commonly terminated upon death of the ward or depletion of assets.

• The ward may petition for removal – the Court will notify the ward and his/her attorney annually of the right to a hearing.

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The CWIC & the Conservator

• The CWIC MUST be in contact with the Conservator when beginning the process of benefits planning.

• The Conservator has been appointed by the Court to control the financial well being of the Ward and clearly any return to work can impact that financial status quo. Effective planning will involve a Conservator who has “bought into” the return to work process.

• The CWIC should request copies of Conservatorship documents should the limits of authority come into question.

• ANY legal disputes concerning authority MUST be referred to an appropriate source for resolution or representation.

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Ray Cebularac79@cornell.edu

Virginia Commonwealth University WIPA National Training CenterEmployment and Disability Institute

Cornell UniversitySchool of Industrial and Labor Relations

201 ILR Extension BuildingIthaca, New York 14853

t. 617.312.3261