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Professor Reid Weisbord Proposes System to Protect Vulnerable Social Security Beneficiaries and Save Government Resources

August 07, 2013 – 

While safeguards exist to protect against misuse of Social Security funds by representative payees for beneficiaries with cognitive impairments, countless instances of theft and misuse go undetected annually because the impaired Social Security beneficiary is typically not competent to monitor the representative payee’s management of funds.  

In an article solicited for publication by the Penn State Law Review, Reid K. Weisbord, Vice Dean and Associate Professor of Law at Rutgers School of Law–Newark, suggested the creation of a “family representative” program as a solution to the problem of representative payee misuse. His article caught the attention of the House Ways and Means Committee Subcommittee on Social Security and Weisbord was given the opportunity to submit a written public statement for the record following the subcommittee’s June 5, 2013 oversight hearing on the representative payee program.

In his statement, Weisbord noted that Congress enacted the Social Security representative payee system in 1939 to protect beneficiaries incapable of managing their finances. The representative is appointed by the Social Security Administration (SSA) to receive and cash benefit checks on behalf of the beneficiary and spend the money appropriately. SSA has been required since 2004 to monitor payees and in some cases reimburse beneficiaries for misused funds, yet a federal study and anecdotal accounts suggest that instances of misuse may be significantly unreported, particularly for beneficiaries in an institutional setting. The agency, wrote Weisbord, lacks a reliable, structural mechanism for detecting misuse and cognitively impaired beneficiaries are often not able to detect or report misuse.

Weisbord advocates creating a “family representative” system “with the twin goals of protecting vulnerable Social Security beneficiaries and conserving scarce government resources.” This system would, he explained, “rely on the volunteered service of family and friends who express a significant degree of concern for the beneficiary but who may be unwilling to accept the burden and liability associated with serving as representative payee.” Because the family member would serve in a non-fiduciary capacity, the burden and liability would be far less onerous than those of the representative payee.

The family representative would be vetted and appointed by SSA to review the accounting information submitted annually by the representative payee. Given the family member’s close relationship with the beneficiary, s/he would be more likely to recognize benefit misuse and would have the legal authority report it to SSA. To prevent fraud or further misuse, the family representative would not have any access to the beneficiary’s finances, nor would he or she receive any payment for accepting the role of family representative. 

“A family representative with first-hand observation of the beneficiary would be in a better position to detect and report benefit misuse than a governmental agency lacking personal contact,” Weisbord’s statement to Congress concluded. “This proposal would be essentially cost-free, protect vulnerable beneficiaries, and reduce government spending on benefit misuse reimbursements.”

Professor Weisbord’s research and teaching interests include nonprofit law, donative transfers, tax policy, and trusts and estates. His published work has been cited in the Restatement (Third) of Trusts and the American Law Institute’s Principles of the Law of Nonprofit Organizations. “Wills for Everyone: Helping Individuals Opt Out of Intestacy,” 53 Boston College Law Review 877 (2012), was recognized as one of the top 10 noteworthy trusts and estates law review articles published in 2012.