Can a Nursing Facility Legally Change the Rep Payee?

The Social Security Administration (SSA) can appoint the nursing facility as the representative payee, but it should not have been done if you did not “request” it.

The facility has a right to apply to be the payee, but the SSA has a specific process and a preference list that generally prioritizes family members over creditors (like the facility).

1. The Power of the SSA

• SSA determines the payee: Only the Social Security Administration has the legal authority to appoint a representative payee. They do not recognize a standard power of attorney (POA) for their benefits.
• The facility can apply: A nursing facility is legally allowed to apply to be the representative payee, especially if the resident is unable to manage their own benefits and there are payment issues. They are considered a creditor because your brother owes them money for his care.

2. The Problem: The False Statement

The core issue is the Social Security letter stating the change was “per my request.”

• If you did not make this request, the facility may have filed an application or a fraudulent statement to the SSA claiming that the current payee (you) stepped down or asked for the change. This is a very serious violation of SSA rules.
• Violation of preference: The SSA has a preference list. They typically look for a spouse, legal guardian, or relative (like you) first. By claiming you requested the change, the facility may have bypassed the normal SSA investigation that might have kept you in the role.

Your Action Plan

You need to address this immediately, as the facility may now have control over your brother’s Social Security payment and is responsible for managing it on his behalf.

1. Contact Social Security Immediately

• Call or visit: Contact your brother’s local Social Security Administration field office (or call the national line at 1-800-772-1213) as soon as possible.
• Be clear: State clearly that you did not request to be removed as the representative Payee and that the letter's statement is false. You are challenging their decision and you want to be reinstated.
• File an appeal: You have the right to appeal the SSA’s decision to change the payee. Ask the SSA representative for the necessary appeal forms and procedures.

2. Understand the Facility’s New Role

As the new representative payee, the nursing facility must follow strict rules:

• Use funds for your brother’s needs: They must use the funds for his current and future needs (shelter, food, clothing, medical care, and personal items).
• Personal Needs Allowance (PNA): If your brother is on Medicaid, he is entitled to a small amount of money (the PNA, usually around $30-$200 per month, depending on the state) for personal items that the facility cannot touch. The facility must give this money to him.
• Accounting: They must keep records of how they spend his money and provide a written accounting to the SSA upon request.

Key Takeaway: If your brother is receiving Medicaid, the facility is entitled to most of his Social Security income to cover the “patient liability” portion of the cost of care. However, the process of changing the rep payee must still be legal and transparent through the SSA.

You have the right to appeal and to report any improper activity concerning his benefits.