This will be a column about people who need help managing their Social Security affairs.
People regularly send me emails about this topic. A typical email might go something like this: “My 90-year-old grandmother is having a hard time making ends meet and managing all her affairs. I had been given a power of attorney myself to help her do things. But when I recently got the social security called to change my grandma’s direct deposit address for her social security checks, they told my grandma to do it herself, don’t they understand what ‘power of attorney’ means?”
Trust me, the Social Security Administration understands what that means. But what the people who send me questions like this don’t understand is that “power of attorney” is essentially a meaningless designation for social security purposes. Let me explain.
Social Security rules have always been very strict regarding the privacy of one’s data. For example, there is no way I can get Social Security information about any of my readers from the Social Security Administration. And you couldn’t get any information about me. I couldn’t even get any information about my wife. If I called SSA tomorrow and asked, “Can you tell me how much my wife receives each month?” — they would rightly say to me, “Sorry, sir; that information is private and we cannot disclose it to you.”
Those privacy laws are behind SSA’s rules regarding trying to help your grandma (or anyone else for that matter) with their Social Security matters. Having “power of attorney” over anyone gives you absolutely no right to break the law that says SSA must keep our Social Security information private.
I hear many of you say, “But come on, Tom; this lady is just trying to help her grandmother change her bank address.” I understand that point. But you have to understand that the law is very clear on this. As long as people are mentally capable to handle their own Social Security affairs, they have that right to the privacy of their records.
Those two words, “mentally capable,” are the keys to helping Grandma with her Social Security matters. To turn that around, if she’s mentally unable to manage her own affairs with Social Security, you, or another close relative, can be named as what SSA calls her “representative beneficiary.”
If that happens, Grandma’s Social Security checks will be in your name and sent to her bank account, your account, or some type of joint account that you set up. Once you’ve been named her representative beneficiary, you can (and should) handle all of her other Social Security matters.
So if grandma is just having a hard time making ends meet, but she’s still in a good mental state, then she (whatever help you can give her) will have to take care of her own Social Security matters. For example, with your help, she can call SSA at 800-772-1213 or go online at www.socialsecurity.gov to change her direct deposit information.
But if Grandma ever gets to the point where she’s mentally incapable of handling Social Security matters, call SSA and apply as her representative beneficiary. You fill out a short form and you’re asked to have a doctor or other medical professional sign a statement that your grandmother is mentally incapable of handling her Social Security affairs.
Once your claim is approved, Grandma’s checks will be in your name. For example, if you are Jane Doe and she is Mary Doe, the bill will show the benefits paid to “Jane Doe for Mary Doe”.
Along with the designation of the representative beneficiary come some important responsibilities. First, you will periodically need to account for how you spent her money. SSA will send you a form (usually once a year) asking you to show what you did with Grandma’s Social Security money. Usually that means paying her rent, running her errands, paying her utility bills, etc.
Incidentally, there are some representative beneficiary situations where annual accounts are not required. For example, if a parent is a beneficiary for a minor child, or a spouse is the beneficiary of another spouse, SSA will not require you to complete the annual accounting form. Still, these people should keep track of how they spend Social Security money in case there are problems and SSA asks for proof.
It’s nice that your grandma has someone like you who takes care of her. But there are times when that doesn’t happen. Someone may need a beneficiary, but no one willingly steps forward to fill that role. SSA has a list of beneficiaries, with close relatives or those who have custody of the Social Security beneficiary at the top of the list. Sometimes, if a person is in an institution, such as a nursing home or other health care facility, it is simply easiest to send the benefits directly to that facility.
There are also times when there can be a family quarrel about who should be the beneficiary for a mentally incompetent person. Different family members will each insist that the benefits be paid to themselves. Next, SSA must investigate, usually using the aforementioned list of preferred beneficiaries, and decide who is the right person for that role.
There are also times when a family member accuses another family member of misusing the Social Security funds intended for an ineligible Social Security beneficiary. Once again, SSA must step into the middle of these family feuds and figure out what’s going on.
Much of this can be avoided with what SSA calls a “pre-designation of representative beneficiary.” If you are a Social Security beneficiary who is still in good mental health, you can contact SSA and name someone you would prefer to be your beneficiary, should you ever need to. This can avoid a lot of hassle later on.
If you have a Social Security question, Tom Margenau has a book with all the answers. It is called Social Security – simple and smart. You can find the book at www.creators.com/books.