(A)
(i) Payments of the benefit of any individual may be made to any such individual or to the eligible spouse (if any) of such individual or partly to each.
(ii)
(I) Upon a determination by the Commissioner of Social Security that the interest of such individual would be served thereby, such payments shall be made, regardless of the legal competency or incompetency of the individual or eligible spouse, to another individual, or an organization, with respect to whom the requirements of subparagraph (B) have been met (in this paragraph referred to as such individuals representative payee) for the use and benefit of the individual or eligible spouse.
(II) In the case of an individual eligible for benefits under this subchapter by reason of disability, the payment of such benefits shall be made to a representative payee if the Commissioner of Social Security determines that such payment would serve the interest of the individual because the individual also has an alcoholism or drug addiction condition (as determined by the Commissioner) and the individual is incapable of managing such benefits.
(iii) If the Commissioner of Social Security or a court of competent jurisdiction determines that the representative payee of an individual or eligible spouse has misused any benefits which have been paid to the representative payee pursuant to clause (ii) or section
405 (j)(1) or
1007 of this title, the Commissioner of Social Security shall promptly terminate payment of benefits to the representative payee pursuant to this subparagraph, and provide for payment of benefits to an alternative representative payee of the individual or eligible spouse or, if the interest of the individual under this subchapter would be served thereby, to the individual or eligible spouse.
(iv) For purposes of this paragraph, misuse of benefits by a representative payee occurs in any case in which the representative payee receives payment under this subchapter for the use and benefit of another person and converts such payment, or any part thereof, to a use other than for the use and benefit of such other person. The Commissioner of Social Security may prescribe by regulation the meaning of the term use and benefit for purposes of this clause.
(B)
(i) Any determination made under subparagraph (A) for payment of benefits to the representative payee of an individual or eligible spouse shall be made on the basis of
(I) an investigation by the Commissioner of Social Security of the person to serve as representative payee, which shall be conducted in advance of such payment, and shall, to the extent practicable, include a face-to-face interview with such person; and
(II) adequate evidence that such payment is in the interest of the individual or eligible spouse (as determined by the Commissioner of Social Security in regulations).
(ii) As part of the investigation referred to in clause (i)(I), the Commissioner of Social Security shall
(I) require the person being investigated to submit documented proof of the identity of such person, unless information establishing such identity was submitted with an application for benefits under subchapter II of this chapter, subchapter VIII of this chapter, or this subchapter;
(II) verify the social security account number (or employer identification number) of such person;
(III) determine whether such person has been convicted of a violation of section
408,
1011, or
1383a of this title;
(IV) obtain information concerning whether the person has been convicted of any other offense under Federal or State law which resulted in imprisonment for more than 1 year;
(V) obtain information concerning whether such person is a person described in section
1382 (e)(4)(A) of this title; and
(VI) determine whether payment of benefits to such person has been terminated pursuant to subparagraph (A)(iii), whether the designation of such person as a representative payee has been revoked pursuant to section
1007 (a) of this title, and whether certification of payment of benefits to such person has been revoked pursuant to section
405 (j) of this title, by reason of misuse of funds paid as benefits under subchapter II of this chapter, subchapter VIII of this chapter, or this subchapter.
(iii) Benefits of an individual may not be paid to any other person pursuant to subparagraph (A)(ii) if
(I) such person has previously been convicted as described in clause (ii)(III);
(II) except as provided in clause (iv), payment of benefits to such person pursuant to subparagraph (A)(ii) has previously been terminated as described in clause (ii)(VI), the designation of such person as a representative payee has been revoked pursuant to section
1007 (a) of this title, or certification of payment of benefits to such person under section
405 (j) of this title has previously been revoked as described in section
405 (j)(2)(B)(i)(VI) of this title;
(III) except as provided in clause (v), such person is a creditor of such individual who provides such individual with goods or services for consideration;
(IV) the person has previously been convicted as described in clause (ii)(IV) of this subparagraph, unless the Commissioner determines that the payment would be appropriate notwithstanding the conviction; or
(V) such person is a person described in section
1382 (e)(4)(A) of this title.
(iv) The Commissioner of Social Security shall prescribe regulations under which the Commissioner of Social Security may grant an exemption from clause (iii)(II) to any person on a case-by-case basis if such exemption would be in the best interest of the individual or eligible spouse whose benefits under this subchapter would be paid to such person pursuant to subparagraph (A)(ii).
(v) Clause (iii)(III) shall not apply with respect to any person who is a creditor referred to therein if such creditor is
(I) a relative of such individual if such relative resides in the same household as such individual;
(II) a legal guardian or legal representative of such individual;
(III) a facility that is licensed or certified as a care facility under the law of a State or a political subdivision of a State;
(IV) a person who is an administrator, owner, or employee of a facility referred to in subclause (III) if such individual resides in such facility, and the payment of benefits under this subchapter to such facility or such person is made only after good faith efforts have been made by the local servicing office of the Social Security Administration to locate an alternative representative payee to whom the payment of such benefits would serve the best interests of such individual; or
(V) an individual who is determined by the Commissioner of Social Security, on the basis of written findings and under procedures which the Commissioner of Social Security shall prescribe by regulation, to be acceptable to serve as a representative payee.
(vi) The procedures referred to in clause (v)(V) shall require the individual who will serve as representative payee to establish, to the satisfaction of the Commissioner of Social Security, that
(I) such individual poses no risk to the beneficiary;
(II) the financial relationship of such individual to the beneficiary poses no substantial conflict of interest; and
(III) no other more suitable representative payee can be found.
(vii) In the case of an individual described in subparagraph (A)(ii)(II), when selecting such individuals representative payee, preference shall be given to
(I) a certified community-based
nonprofit">
nonprofit social service agency (as defined in subparagraph (I));
(II) a Federal, State, or local government agency whose mission is to carry out income maintenance, social service, or health care-related activities;
(III) a State or local government agency with fiduciary responsibilities; or
(IV) a designee of an agency (other than of a Federal agency) referred to in the preceding subclauses of this clause, if the Commissioner of Social Security deems it appropriate,
unless the Commissioner of Social Security determines that selection of a family member would be appropriate.
(viii) Subject to clause (ix), if the Commissioner of Social Security makes a determination described in subparagraph (A)(ii) with respect to any individuals benefit and determines that direct payment of the benefit to the individual would cause substantial harm to the 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 such benefit to the individual, until such time as the selection of a representative payee is made pursuant to this subparagraph.
(ix)
(I) Except as provided in subclause (II), any deferral or suspension of direct payment of a benefit pursuant to clause (viii) shall be for a period of not more than 1 month.
(II) Subclause (I) shall not apply in any case in which the individual or eligible spouse is, as of the date of the Commissioners determination, legally incompetent, under the age of 15 years, or described in subparagraph (A)(ii)(II).
(x) Payment pursuant to this subparagraph of any benefits which are deferred or suspended pending the selection of a representative payee shall be made to the individual, or to the representative payee upon such selection, as a single sum or over such period of time as the Commissioner of Social Security determines is in the best interests of the individual entitled to such benefits.
(xi) Any individual who is dissatisfied with a determination by the Commissioner of Social Security to pay such individuals benefits to a representative payee under this subchapter, 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, and to judicial review of the Commissioners final decision, to the same extent as is provided in subsection (c) of this section.
(xii) In advance of the first payment of an individuals benefit to a representative payee under subparagraph (A)(ii), the Commissioner of Social Security shall provide written notice of the Commissioners initial determination to make any such payment. Such notice shall be provided to such individual, except that, if such individual
(I) is under the age of 15,
(II) is an unemancipated minor under the age of 18, or
(III) is legally incompetent,
then such notice shall be provided solely to the legal guardian or legal representative of such individual.
(xiii) Any notice described in clause (xii) shall be clearly written in language that is easily understandable to the reader, shall identify the person to be designated as such individuals representative payee, and shall explain to the reader the right under clause (xi) of such individual or of such individuals legal guardian or legal representative
(I) to appeal a determination that a representative payee is necessary for such individual,
(II) to appeal the designation of a particular person to serve as the representative payee of such individual, and
(III) to review the evidence upon which such designation is based and submit additional evidence.
(xiv) Notwithstanding the provisions of section
552a of title
5 or any other provision of Federal or State law (other than section 6103 of the Internal Revenue Code of 1986 and section
1306 (c) of this title), the Commissioner shall furnish any Federal, State, or local law enforcement officer, upon the written request of the officer, with the current address, social security account number, and photograph (if applicable) of any person investigated under this subparagraph, if the officer furnishes the Commissioner with the name of such person and such other identifying information as may reasonably be required by the Commissioner to establish the unique identity of such person, and notifies the Commissioner that
(I) such person is described in section
1382 (e)(4)(A) of this title,
(II) such person has information that is necessary for the officer to conduct the officers official duties, and
(III) the location or apprehension of such person is within the officers official duties.
(C)
(i) In any case where payment is made under this subchapter to a representative payee of an individual or spouse, the Commissioner of Social Security shall establish a system of accountability monitoring whereby such person shall report not less often than annually with respect to the use of such payments. The Commissioner of Social Security shall establish and implement statistically valid procedures for reviewing such reports in order to identify instances in which such persons are not properly using such payments.
(ii) Clause (i) shall not apply in any case where the representative payee is a State institution. In such cases, the Commissioner of Social Security shall establish a system of accountability monitoring for institutions in each State.
(iii) Clause (i) shall not apply in any case where the individual entitled to such payment is a resident of a Federal institution and the representative payee is the institution.
(iv) Notwithstanding clauses (i), (ii), and (iii), the Commissioner of Social Security may require a report at any time from any representative payee, if the Commissioner of Social Security has reason to believe that the representative payee is misusing such payments.
(v) In any case in which the person described in clause (i) or (iv) receiving payments on behalf of another fails to submit a report required by the Commissioner of Social Security under clause (i) or (iv), the Commissioner may, after furnishing notice to the person and the individual entitled to the payment, require that such person appear in person at a field office of the Social Security Administration serving the area in which the individual resides in order to receive such payments.
(D)
(i) Except as provided in the next sentence, a qualified organization may collect from an individual a monthly fee for expenses (including overhead) incurred by such organization in providing services performed as such individuals representative payee pursuant to subparagraph (A)(ii) if the fee does not exceed the lesser of
(I) 10 percent of the monthly benefit involved, or
(II) $25.00 per month ($50.00 per month in any case in which an individual is described in subparagraph (A)(ii)(II)).
A qualified organization may not collect a fee from an individual for any month with respect to which the Commissioner of Social Security or a court of competent jurisdiction has determined that the organization misused all or part of the individuals benefit, and any amount so collected by the qualified organization for such month shall be treated as a misused part of the individuals benefit for purposes of subparagraphs (E) and (F). The Commissioner of Social Security shall adjust annually (after 1995) each dollar amount set forth in subclause (II) of this clause under procedures providing for adjustments in the same manner and to the same extent as adjustments are provided for under the procedures used to adjust benefit amounts under section 415 (i)(2)(A) of this title, except that any amount so adjusted that is not a multiple of $1.00 shall be rounded to the nearest multiple of $1.00. Any agreement providing for a fee in excess of the amount permitted under this clause shall be void and shall be treated as misuse by the organization of such individuals benefits.
(ii) For purposes of this subparagraph, the term qualified organization means any State or local government agency whose mission is to carry out income maintenance, social service, or health care-related activities, any State or local government agency with fiduciary responsibilities, or any certified community-based
nonprofit">
nonprofit social service agency (as defined in subparagraph (I)), if the agency, in accordance with any applicable regulations of the Commissioner of Social Security
(I) regularly provides services as a representative payee pursuant to subparagraph (A)(ii) or section
405 (j)(4) or
1007 of this title concurrently to 5 or more individuals; and
(II) demonstrates to the satisfaction of the Commissioner of Social Security that such agency is not otherwise a creditor of any such individual.
The Commissioner of Social Security shall prescribe regulations under which the Commissioner of Social Security may grant an exception from subclause (II) for any individual on a case-by-case basis if such exception is in the best interests of such individual.
(iii) Any qualified organization which knowingly charges or collects, directly or indirectly, any fee in excess of the maximum fee prescribed under clause (i) or makes any agreement, directly or indirectly, to charge or collect any fee in excess of such maximum fee, shall be fined in accordance with title 18, or imprisoned not more than 6 months, or both.
(iv) In the case of an individual who is no longer eligible for benefits under this subchapter but to whom any amount of past-due benefits under this subchapter has not been paid, for purposes of clause (i), any amount of such past-due benefits payable in any month shall be treated as a monthly benefit referred to in clause (i)(I).
(E) Restitution.— In cases 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 beneficiary or the beneficiarys representative payee of an amount equal to such misused benefits. In any case in which a representative payee that
(i) is not an individual (regardless of whether it is a qualified organization within the meaning of subparagraph (D)(ii)); or
(ii) is an individual who, for any month during a period when misuse occurs, serves 15 or more individuals who are beneficiaries under this subchapter, subchapter II of this chapter, subchapter VIII of this chapter, or any combination of such subchapters;
misuses all or part of an individuals benefit paid to such representative payee, the Commissioner of Social Security shall pay to the beneficiary or the beneficiarys alternative representative payee an amount equal to the amount of such benefit so misused. The provisions of this subparagraph are subject to the limitations of subparagraph (H)(ii). The Commissioner of Social Security shall make a good faith effort to obtain restitution from the terminated representative payee.
(G)
(i) In addition to such other reviews of representative payees as the Commissioner of Social Security may otherwise conduct, the Commissioner shall provide for the periodic onsite review of any person or agency that receives the benefits payable under this subchapter (alone or in combination with benefits payable under subchapter II of this chapter or subchapter VIII of this chapter) to another individual pursuant to the appointment of the person or agency as a representative payee under this paragraph, section
405 (j) of this title, or section
1007 of this title in any case in which
(I) the representative payee is a person who serves in that capacity with respect to 15 or more such individuals;
(II) the representative payee is a certified community-based
nonprofit">
nonprofit social service agency (as defined in subparagraph (I) of this paragraph or section
405 (j)(10) of this title); or
(III) the representative payee is an agency (other than an agency described in subclause (II)) that serves in that capacity with respect to 50 or more such individuals.
(ii) Within 120 days after the end of each fiscal year, the Commissioner shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report on the results of periodic onsite reviews conducted during the fiscal year pursuant to clause (i) and of any other reviews of representative payees conducted during such fiscal year in connection with benefits under this subchapter. Each such report shall describe in detail all problems identified in the reviews and any corrective action taken or planned to be taken to correct the problems, and shall include
(I) the number of the reviews;
(II) the results of such reviews;
(III) the number of cases in which the representative payee was changed and why;
(IV) the number of cases involving the exercise of expedited, targeted oversight of the representative payee by the Commissioner conducted upon receipt of an allegation of misuse of funds, failure to pay a vendor, or a similar irregularity;
(V) the number of cases discovered in which there was a misuse of funds;
(VI) how any such cases of misuse of funds were dealt with by the Commissioner;
(VII) the final disposition of such cases of misuse of funds, including any criminal penalties imposed; and
(VIII) such other information as the Commissioner deems appropriate.