A Guide for Agencies, Nonprofits, and Governments

Shifting demographic and societal patterns are both contributing to an anticipated increase in the need for representative payee services. According to the Social Security Administration, the number of payee clients is expected to increase significantly. Of course, some of these clients will have family or friends care for them. But some will need a reliable and proficient representative payee service.

Is your organization or agency ready to serve them? We’ve put together the following overview to help you prepare for this anticipated increase. Now is the time to review your procedures, improve efficiencies, and add representative payee software to your organization to ensure you’re ready and able to help more people with their financial needs.

Anticipated Demand for Representative Payee Services

Representative payee services refer to a program provided by various government agencies, typically the Social Security Administration (SSA) in the United States. This service is designed to help individuals who are unable to manage their Social Security or Supplemental Security Income (SSI) benefits due to factors such as age, disability, or other limitations.

When someone is deemed unable to manage their benefits independently, the SSA appoints a representative payee to receive and manage the benefits on their behalf. The representative payee is typically a trusted individual or organization chosen to act in the best interest of the beneficiary. Representative payees are responsible for ensuring that the beneficiary's needs are met, including using the benefits to cover basic living expenses such as housing, food, clothing, and medical care.

The representative payee must keep accurate records of how the benefits are used and report to the SSA regularly. They must also follow certain rules and guidelines set forth by the SSA to ensure that the beneficiary's funds are managed appropriately and in accordance with their best interests. This service aims to protect vulnerable individuals who may struggle to handle their finances independently, ensuring that they receive the support they need to maintain a decent quality of life.

Data from the Social Security Administration indicates that over the next two decades, demand for representative payee services is expected to increase by 3.27 million in 2025 to 3.56 million in 2035. The increase comes primarily from age 85 and older workers who lack family members to provide payee services. The SSA reports that 71.1% of disabled worker beneficiaries have a family member who serve in the role, but only 57.3% of retired-worker beneficiaries do. Therefore, the increase is anticipated to come mostly from retired-worker beneficiaries in the Baby Boom generation who lack family to provide such support.

Preparing Your Agency for Increased Demand

The SSA statistics provide agencies and organizations with ample time to prepare for the increased demand. The following best practices, along with the adoption of representative payee software, will help you meet both demand and increase your business opportunities.

Research and Adopt Best Practices

A great source of best practices may be found in the Social Security Administration’s guide to representative payee services.

The SSA advises agencies and organizations to:

• Use benefits for the beneficiary’s current needs
• Maintain accurate records
• Report changes that may affect benefits
• Submit annual reports
• Keep clear, detailed, and accurate records of all transactions related to benefits
• Retain receipts for purchases made on behalf of the beneficiary
• Record all income and expenses related to the beneficiary
• Document all correspondence with the SSA

It's important to always act in the best interests of the payee. Avoid any conflicts of interest that may arise from the organization's relationship with the beneficiary. This includes refraining from using the beneficiary's funds for the organization's own benefit or for the benefit of its employees or affiliates.

Other proactive best practices you can adopt include:

• Communications: Adopt policies and systems to ensure open communication with the beneficiary and their caregivers about how their benefits are being used. Be transparent about any fees or charges associated with providing representative payee services.
  
  
• Data privacy and security: Safeguard the privacy and confidentiality of the beneficiary's personal and financial information. Ensure that all sensitive information is stored securely, and that access is restricted to authorized individuals. Schedule annual reviews of internal controls and policies, and work with your IT specialist or software vendor to ensure you understand and fully comply with best practices related to data security and the systems that you use.
  
  
• Remain compliant: Stay informed about changes to SSA policies and regulations related to representative payee responsibilities. This may involve attending training sessions, staying in touch with SSA representatives, and accessing resources provided by the SSA.
  
  
• Keep records updated: Regularly review and update records to ensure that they accurately reflect the beneficiary's current needs and circumstances. This includes updating contact information, income and expense records, and any other relevant documentation. Promptly report any changes in the beneficiary's circumstances that may affect their eligibility for benefits or the amount of benefits they receive. This includes changes in living arrangements, income, assets, or health status.

By following these best practices, organizations can fulfill their responsibilities as representative payees and ensure the well-being and financial security of the individuals they serve.

Use Representative Payee Software

Representative payee software is accounting software specifically designed for handling representative payee benefits and services. Spreadsheets and off-the-shelf small business accounting software isn’t designed to manage the complex accounting and reporting needs for representative payees. Trying to get by with it may lead to frustration, mistakes, wasted time, and poor reporting, all of which decreases efficiency and leaks profits for your business.

Improve Efficiencies Throughout Your Organization
When you use representative payee software, you can improve efficiencies throughout your organization and streamline accounting processes. The following are many examples of things you can do to improve efficiency throughout your organization.

Automate Repeat Processes
Many tasks related to handling benefits can be automated. This includes importing client payments directly from the SSA, SSI and others into a file provided by your bank.

Setting up reoccurring payments for important expenses such as rent and utilities is also another time-saving step. You can also automate things such as interest allocation to clients, assessments, and more.

Improve Management of Client Funds
Keep clear and detailed records of your clients’ funds, including how they are managed. Use virtual checking accounts for each payee in a combined account for reconciliation. Create and review monthly client budgets, keeping them updated each month. Set up automatic alerts when client budgets are exceeded. Automate SSA representative payee reporting using the reports in the system. And lastly, create dashboards that show immediately important information, such as a list of clients with excess or low funds or other metrics you need to track.

Bulletproof Your Audit Process
Audits are an important part of accounting for representative payees. Using representative payee software, you can make the entire auditing process easier for everyone. Audits trails for all transactions with date, time, and date posted or changed can be viewed within the platform. Documents, such as bills and leases, can be scanned into the system and attached to client files. Fields can be added to transactions to capture additional information such as alcohol and tobacco restrictions. Positive pay, a system that detects check fraud, can also be activated, and used to minimize potential fraud. Lastly, you can use blank check stock and print checks on demand for efficiency – and to add an additional fraud protection layer for your clients.

Enhance Internal Workflows
Representative payee software also enables you to decentralize many processes. This enables growth for your agency or organization. A few ways in which this supports decentralization is to provide controlled access to client accounts. You can establish who has access to what within the system via user profiles, so you can offer case managers access to client balances and client information, or provide dashboard access to others, and more.

Another way in which internal workflows can be enhanced is the payment approval workflow. Examine your current payment approval process now. Can this be automated within the representative payee software? Many workflows can be, including routine payments for approval and setting up reminders when payments are due.

Bank reconciliation often takes a great deal of time. You can improve efficiency by automating daily reconciliation within representative payee software. And although it’s not something directly related to software, using debit cards and ACH for client and vendor payments is another efficient way to track payments by client and account.

Better Banking

When is the last time you checked your bank’s services? Now is a good time to review your current bank’s services, explore new services they offer, and compare banks if you feel you aren’t getting the support you need.

Some of the banking services that representative payee businesses benefit from include:

• Remote deposit capture so you can scan and deposit checks from your office – many banks now offer this through a phone or computer app that makes it easy to deposit checks without making a special trip.
• Bill Pay through the bank’s online portal or app.
• ACH origination to send outgoing electronic payments and load debit cards.
• Positive Pay services to help minimize and prevent check fraud.

Also, if you are moving from spreadsheets or basic accounting software to representative payee software, check with your bank about receiving files monthly to incorporate into the system. Downloading files from your banking’s online portal and importing them into the representative payee system should be easy to do if your bank offers such files.

Empower Staff and Case Managers

As previously mentioned, representative payee software offers user accounts with controlled access levels. This means you can empower staff and case managers to look up and enter information into the system itself. For example, case managers can view client balances, compare actual funds to balances, and print check registers for their clients.

Automated workflows can also save a great deal of time. Case managers can enter check requests. If you set up an automated workflow, the request can follow a predetermined routing process that eventually becomes an approved check request.

Lastly, software with document management built in (or easily added) makes it easy to scan paper documents into the system and attach them to client files. This can save a great deal of time since all a client’s documents and paperwork are in one system, accessible to staff and case managers. It reduces the amount of physical paper you need to keep on file.

Debit Cards for Client Payments

Offering debit cards to clients and funding them instead of issuing checks offers numerous advantages. immediate perk is that it empowers individuals, giving them a stronger sense of independence and control over their finances. Additionally, cards are far more efficient than mailing or having clients pick up checks. They're also cost-effective, saving time and money otherwise spent on printing and mailing checks. Moreover, they enhance internal control measures. If a client misplaces a card, it's simple to deactivate it and issue a replacement. While some banks may offer these debit card services, if yours doesn't, there are specialized companies catering to the Representative Payee market that provide customized solutions.

Enhanced Efficiencies Equals a Better Representative Payee Organization

Representative payee organizations provide valuable services to a potentially vulnerable population. By 2035, this population is expected to increase, with a corresponding increase in demand for services.

Organizations that provide representative payee services would be wise to improve their processes and systems now to prepare for the future. This includes reviewing internal processes, examining banking relationships, and adopting representative payee software that empowers staff and case managers and adds additional security and transparency to the financial management of client accounts. With these steps in mind, you can ready your organization for the future.

About AccuFund
AccuFund’s Representative Payee system enables tremendous time savings, by relieving the detail-intensive burden of coordinating accounting for individual clients. The system tracks funds received from the Social Security Administration and other agencies; pays rent, utility bills, and other living expenses; and can maintain funds in one shared bank account to simplify reconciliation.

Related Materials
White Paper: Representative Payee Fundamentals
AccuFund Representative Payee Solution
AccuFund Representative Payee Webinar