Guide for Organizational Representative Payees

What is misuse of benefits?

SSA defines misuse as a representative payee using funds for something other than the needs of the beneficiary. A finding of misuse can indicate a potential criminal violation. In all cases where misuse is found, the criminal aspects of the case must be considered. Remedies may include referring the case to the Office of the Inspector General for possible criminal prosecution.

SSA investigates all allegations of misuse, gathers facts and evidence, and makes a formal determination on whether misuse has occurred. If misuse is found, SSA may appoint a new representative payee or make direct payment to the beneficiary. SSA will then initiate action to recover the misused funds. If your organization misuses the beneficiary's funds, then your organization has a legal obligation to make restitution. If your organization is an FFS payee, it would forfeit the fee for payee services for the month(s) of misuse.

If you discover that an employee within your organization has stolen beneficiary funds, immediately contact SSA.

SSA has methods to recoup misused amounts, including repayment from personal Social Security payments or Federal tax refund offsets. Failure to repay a misuse debt could cause SSA to refer the debt to a credit bureau.