When a person with special needs cannot make important financial decisions, either because of her disability or because she has not reached the age of majority, the SSA sends the benefits directly to a third party, known as a representative payee, who is charged with managing the funds for the beneficiary.

The steps to set up a representative payee account are as follows:

1. Once your young adult has been approved for SSI and has received his/her first check, you will need to take that check to a bank to open the representative payee account.
2. Inform an account services representative that you want to open a checking account as a representative payee. A representative payee account is always a checking account.
3. Provide a letter of authorization from the Social Security Administration along with additional identification — a driver’s license, passport, military ID or a state-issued ID. Provide also the name, Social Security number and date of birth of the beneficiary.
4. Endorse the check issued by Social Security and give it to the bank representative as the opening deposit.
5. Call the Social Security office from the bank and provide the routing number for the bank and the number of the checking account if you want monthly checks deposited directly into the checking account. Otherwise, the Social Security Administration will mail the check to your address every month.

When a parent or caregiver signs up to be a representative payee, there are a few things they need to remember.

File Your Representative Payee Report

The Social Security Administration requires that a representative payee file an annual accounting called the Representative Payee Report. This report details what you, as the representative payee, have done with the beneficiary’s funds during the previous year. If you have kept accurate records of the beneficiary’s funds over the course of the year, the report will be very easy to fill out. Commingling funds, or not keeping accurate records of expenditures, can lead to an incredible headache when it comes time to file the report. Not filing the report, on the other hand, could lead to your removal as representative payee.

Know the SSI Rules

If you are serving as a representative payee for a person receiving SSI benefits, your job is made even more difficult by the SSI program’s income and asset rules. For instance, SSI beneficiaries can have only $2,000.00 in their name in order t be eligible for benefits. As representative payee, you must make sure that you know the rules regarding asset accumulation and their effect on the beneficiary.