
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC1007]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                       CHAPTER 7--SOCIAL SECURITY
 
   SUBCHAPTER VIII--SPECIAL BENEFITS FOR CERTAIN WORLD WAR II VETERANS
 
Sec. 1007. Representative payees


(a) In general

    If the Commissioner of Social Security determines that the interest 
of any qualified individual under this subchapter would be served 
thereby, payment of the qualified individual's benefit under this 
subchapter may be made, regardless of the legal competency or 
incompetency of the qualified individual, either directly to the 
qualified individual, or for his or her benefit, to another person (the 
meaning of which term, for purposes of this section, includes an 
organization) with respect to whom the requirements of subsection (b) of 
this section have been met (in this section referred to as the qualified 
individual's ``representative payee''). If the Commissioner of Social 
Security determines that a representative payee has misused any benefit 
paid to the representative payee pursuant to this section, 405(j) of 
this title, or section 1383(a)(2) of this title, the Commissioner of 
Social Security shall promptly revoke the person's designation as the 
qualified individual's representative payee under this subsection, and 
shall make payment to an alternative representative payee or, if the 
interest of the qualified individual under this subchapter would be 
served thereby, to the qualified individual.

(b) Examination of fitness of prospective representative payee

    (1) Any determination under subsection (a) of this section to pay 
the benefits of a qualified individual to a representative payee shall 
be made on the basis of--
        (A) an investigation by the Commissioner of Social Security of 
    the person to serve as representative payee, which shall be 
    conducted in advance of the determination and shall, to the extent 
    practicable, include a face-to-face interview with the person (or, 
    in the case of an organization, a representative of the 
    organization); and
        (B) adequate evidence that the arrangement is in the interest of 
    the qualified individual.

    (2) As part of the investigation referred to in paragraph (1), the 
Commissioner of Social Security shall--
        (A) require the person being investigated to submit documented 
    proof of the identity of the person;
        (B) in the case of a person who has a social security account 
    number issued for purposes of the program under subchapter II of 
    this chapter or an employer identification number issued for 
    purposes of the Internal Revenue Code of 1986, verify the number;
        (C) determine whether the person has been convicted of a 
    violation of section 408, 1011, or 1383a of this title; and
        (D) determine whether payment of benefits to the person in the 
    capacity as representative payee has been revoked or terminated 
    pursuant to this section, section 405(j) of this title, or section 
    1383(a)(2)(A)(iii) of this title by reason of misuse of funds paid 
    as benefits under this subchapter, subchapter II, or XVI of this 
    chapter, respectively.

(c) Requirement for maintaining lists of undesirable payees

    The Commissioner of Social Security shall establish and maintain 
lists which shall be updated periodically and which shall be in a form 
that renders such lists available to the servicing offices of the Social 
Security Administration. The lists shall consist of--
        (1) the names and (if issued) social security account numbers or 
    employer identification numbers of all persons with respect to whom, 
    in the capacity of representative payee, the payment of benefits has 
    been revoked or terminated under this section, section 405(j) of 
    this title, or section 1383(a)(2)(A)(iii) of this title by reason of 
    misuse of funds paid as benefits under this subchapter, subchapter 
    II, or XVI of this chapter, respectively; and
        (2) the names and (if issued) social security account numbers or 
    employer identification numbers of all persons who have been 
    convicted of a violation of section 408, 1011, or 1383a of this 
    title.

(d) Persons ineligible to serve as representative payees

                           (1) In general

        The benefits of a qualified individual may not be paid to any 
    other person pursuant to this section if--
            (A) the person has been convicted of a violation of section 
        408, 1011, or 1383a of this title;
            (B) except as provided in paragraph (2), payment of benefits 
        to the person in the capacity of representative payee has been 
        revoked or terminated under this section, section 405(j) of this 
        title, or section 1383(a)(2)(A)(ii) \1\ of this title by reason 
        of misuse of funds paid as benefits under this subchapter, 
        subchapter II, or subchapter XVI of this chapter, respectively; 
        or
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    \1\ So in original. Probably should be ``1383(a)(2)(A)(iii)''.
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            (C) except as provided in paragraph (2)(B), the person is a 
        creditor of the qualified individual and provides the qualified 
        individual with goods or services for consideration.

                           (2) Exemptions

        (A) The Commissioner of Social Security may prescribe 
    circumstances under which the Commissioner of Social Security may 
    grant an exemption from paragraph (1) to any person on a case-by-
    case basis if the exemption is in the best interest of the qualified 
    individual whose benefits would be paid to the person pursuant to 
    this section.
        (B) Paragraph (1)(C) shall not apply with respect to any person 
    who is a creditor referred to in such paragraph if the creditor is--
            (i) a relative of the qualified individual and the relative 
        resides in the same household as the qualified individual;
            (ii) a legal guardian or legal representative of the 
        individual;
            (iii) a facility that is licensed or certified as a care 
        facility under the law of the political jurisdiction in which 
        the qualified individual resides;
            (iv) a person who is an administrator, owner, or employee of 
        a facility referred to in clause (iii), if the qualified 
        individual resides in the facility, and the payment to the 
        facility or the person is made only after the Commissioner of 
        Social Security has made a good faith effort to locate an 
        alternative representative payee to whom payment would serve the 
        best interests of the qualified individual; or
            (v) a person who is determined by the Commissioner of Social 
        Security, on the basis of written findings and pursuant to 
        procedures prescribed by the Commissioner of Social Security, to 
        be acceptable to serve as a representative payee.

        (C) The procedures referred to in subparagraph (B)(v) shall 
    require the person who will serve as representative payee to 
    establish, to the satisfaction of the Commissioner of Social 
    Security, that--
            (i) the person poses no risk to the qualified individual;
            (ii) the financial relationship of the person to the 
        qualified individual poses no substantial conflict of interest; 
        and
            (iii) no other more suitable representative payee can be 
        found.

(e) Deferral of payment pending appointment of representative payee

                           (1) In general

        Subject to paragraph (2), if the Commissioner of Social Security 
    makes a determination described in the first sentence of subsection 
    (a) of this section with respect to any qualified individual's 
    benefit and determines that direct payment of the benefit to the 
    qualified individual would cause substantial harm to the qualified 
    individual, the Commissioner of Social Security may defer (in the 
    case of initial entitlement) or suspend (in the case of existing 
    entitlement) direct payment of the benefit to the qualified 
    individual, until such time as the selection of a representative 
    payee is made pursuant to this section.

                         (2) Time limitation

        (A) In general

            Except as provided in subparagraph (B), any deferral or 
        suspension of direct payment of a benefit pursuant to paragraph 
        (1) shall be for a period of not more than 1 month.

        (B) Exception in the case of incompetency

            Subparagraph (A) shall not apply in any case in which the 
        qualified individual is, as of the date of the Commissioner of 
        Social Security's determination, legally incompetent under the 
        laws of the jurisdiction in which the individual resides.

                 (3) Payment of retroactive benefits

        Payment of any benefits which are deferred or suspended pending 
    the selection of a representative payee shall be made to the 
    qualified individual or the representative payee as a single sum or 
    over such period of time as the Commissioner of Social Security 
    determines is in the best interest of the qualified individual.

(f) Hearing

    Any qualified individual who is dissatisfied with a determination by 
the Commissioner of Social Security to make payment of the qualified 
individual's benefit to a representative payee under subsection (a) of 
this section or with the designation of a particular person to serve as 
representative payee shall be entitled to a hearing by the Commissioner 
of Social Security to the same extent as is provided in section 1009(a) 
of this title, and to judicial review of the Commissioner of Social 
Security's final decision as is provided in section 1009(b) of this 
title.

(g) Notice requirements

                           (1) In general

        In advance, to the extent practicable, of the payment of a 
    qualified individual's benefit to a representative payee under 
    subsection (a) of this section, the Commissioner of Social Security 
    shall provide written notice of the Commissioner's initial 
    determination to so make the payment. The notice shall be provided 
    to the qualified individual, except that, if the qualified 
    individual is legally incompetent, then the notice shall be provided 
    solely to the legal guardian or legal representative of the 
    qualified individual.

                      (2) Specific requirements

        Any notice required by paragraph (1) shall be clearly written in 
    language that is easily understandable to the reader, shall identify 
    the person to be designated as the qualified individual's 
    representative payee, and shall explain to the reader the right 
    under subsection (f) of this section of the qualified individual or 
    of the qualified individual's legal guardian or legal 
    representative--
            (A) to appeal a determination that a representative payee is 
        necessary for the qualified individual;
            (B) to appeal the designation of a particular person to 
        serve as the representative payee of the qualified individual; 
        and
            (C) to review the evidence upon which the designation is 
        based and to submit additional evidence.

(h) Accountability monitoring

                           (1) In general

        In any case where payment under this subchapter is made to a 
    person other than the qualified individual entitled to the payment, 
    the Commissioner of Social Security shall establish a system of 
    accountability monitoring under which the person shall report not 
    less often than annually with respect to the use of the payments. 
    The Commissioner of Social Security shall establish and implement 
    statistically valid procedures for reviewing the reports in order to 
    identify instances in which persons are not properly using the 
    payments.

                         (2) Special reports

        Notwithstanding paragraph (1), the Commissioner of Social 
    Security may require a report at any time from any person receiving 
    payments on behalf of a qualified individual, if the Commissioner of 
    Social Security has reason to believe that the person receiving the 
    payments is misusing the payments.

                   (3) Maintaining lists of payees

        The Commissioner of Social Security shall maintain lists which 
    shall be updated periodically of--
            (A) the name, address, and (if issued) the social security 
        account number or employer identification number of each 
        representative payee who is receiving benefit payments pursuant 
        to this section, section 405(j) of this title, or section 
        1383(a)(2) of this title; and
            (B) the name, address, and social security account number of 
        each individual for whom each representative payee is reported 
        to be providing services as representative payee pursuant to 
        this section, section 405(j) of this title, or section 
        1383(a)(2) of this title.

                  (4) Maintaining lists of agencies

        The Commissioner of Social Security shall maintain lists, which 
    shall be updated periodically, of public agencies and community-
    based nonprofit social service agencies which are qualified to serve 
    as representative payees pursuant to this section and which are 
    located in the jurisdiction in which any qualified individual 
    resides.

(i) Restitution

    In any case where the negligent failure of the Commissioner of 
Social Security to investigate or monitor a representative payee results 
in misuse of benefits by the representative payee, the Commissioner of 
Social Security shall make payment to the qualified individual or the 
individual's alternative representative payee of an amount equal to the 
misused benefits. The Commissioner of Social Security shall make a good 
faith effort to obtain restitution from the terminated representative 
payee.

(Aug. 14, 1935, ch. 531, title VIII, Sec. 807, as added Pub. L. 106-169, 
title II, Sec. 251(a), Dec. 14, 1999, 113 Stat. 1846.)

                       References in Text

    The Internal Revenue Code of 1986, referred to in subsec. (b)(2)(B), 
is classified generally to Title 26, Internal Revenue Code.


                            Prior Provisions

    For prior provisions, see note set out under section 1001 of this 
title.

                  Section Referred to in Other Sections

    This section is referred to in sections 405, 1008, 1011, 1383 of 
this title.
