TN 46 (01-17)

Citations:

Sections 205(j) and 1631(a)(2) of the Social Security Act and Sections 412(a) and 413(b) of the Federal Coal Mine Health and Safety Health Act;

20 CFR 404.2001 – 404.2065, 410.581 – 410.591, 416.601 – 416.665

A. Capability determination

Capability refers to a beneficiary’s ability to manage or direct the management of his or her Social Security benefits. Follow this general principle regarding capability issues for adult beneficiaries:

Presume that a legally competent adult beneficiary is capable of managing, or directing someone else to manage, the benefits to which he or she is entitled, unless there are indicators or evidence to the contrary.

For information on when there is not a presumption of capability, see GN 00502.001C, in this section.

When you suspect a beneficiary may not be capable, you must make a capability determination. When developing capability, a beneficiary, who exercises direct involvement, control, and choice in identifying, accessing, and managing services to meet his or her personal and other needs, is capable, and you must pay him or her directly. Make a finding of incapability only when it is clearly in the best interest of the beneficiary to do so, based on convincing evidence (legal, lay, and medical), using sound and reasoned judgment.

The determination that a beneficiary is incapable of managing or directing someone else to manage his or her benefits is one of the most important determinations you will make. This determination may deprive an individual of fiscal independence and self-determination regarding how benefits are spent. 

You must follow the instructions in GN 00502.020 through GN 00502.075 when making capability determinations.

If you determine a beneficiary is incapable, you must identify and appoint a suitable representative payee. For information on representative payee payment, see GN 00502.001B, in this section.

After the initial capability determination, you must remain alert to indications of a change in the beneficiary’s condition or circumstances that might require a new capability determination.

B. Representative payee payment

A representative payee or “payee” is a third party who manages the Social Security Administration (SSA) benefits of a beneficiary who is incapable of managing or directing the management of his or her own benefits. SSA decides whether to certify payments through a payee to ensure the physical, mental, and emotional well-being of the beneficiary in a manner that both preserves dignity and protects basic rights.

Base your determination to appoint a payee on the beneficiary’s capability. Do not feel compelled to find a beneficiary incapable in order to provide him or her “protection” or as a matter of convenience.

Once you determine a beneficiary is incapable and needs a payee, you must follow the instructions in subchapters GN 00502.000 through GN 00506.000 to help you identify and appoint a suitable payee. In addition, follow these guidelines:

• To the extent possible, offer the beneficiary an early opportunity to participate in the selection process. The beneficiary may be a key source in the search for a suitable payee. The beneficiary may be able to provide you with information regarding individuals who currently assist him or her in day-to-day living, as well as those he or she trusts to handle financial affairs.

• Find an able, caring payee for any beneficiary whom you determine as incapable, considering the beneficiary’s best interests.

• Before changing a current payee, contact the current payee per GN 00504.100.

Attention to payee issues should not end once SSA appoints a payee or determines that a payee is not required. You must remain alert to indications of a change in the payee or beneficiary’s circumstances that may require a new capability determination or payee appointment (this may include changes in direct payment or payee payment).

C. Direct payment prohibitions for beneficiaries who must have a representative payee appointed

SSA prohibits the following types of beneficiaries from receiving direct payments, and presumption of capability does not apply. These beneficiaries do not need capability determinations and must receive benefits through a payee:

• Adult beneficiaries who are judged legally incompetent, follow the instructions in GN 00502.023; and

• Children under age 15 (unless they have been legally emancipated). (For direct payment to children, 15 to 17, follow the instructions in GN 00502.070).

For beneficiaries not listed under these prohibitions, you must make a capability determination, based on convincing evidence as noted in GN 00502.001A, in this section, to resolve any question regarding a beneficiary’s ability to manage or direct the management of benefits.

D. Instructions for payee issues

The following table contains instructions on capability, selection of payee, and other issues covered in other subchapters that deal with specific payee issues: