Railroad Retirement Board
September 2010
The
Railroad Retirement Board’s policy is that every annuitant has the right to
manage his or her own benefits. However, when physical or mental
impairments make a railroad retirement annuitant incapable of properly handling
benefit payments, or where the Railroad Retirement Board (RRB) determines that
the interests of the annuitant so require, the RRB can appoint a representative
payee to act on the annuitant’s behalf. A representative payee may be
either a person or an organization selected by the RRB to receive benefits on
behalf of an annuitant.
The following questions and answers provide
information for family members, or others, who may have to act on behalf of an
annuitant.
1. Does
the RRB have legal authority to appoint a representative payee for an
annuitant?
The Railroad
Retirement Act gives the RRB authority to determine whether direct payment of
benefits, or payment to a representative payee, will best serve an annuitant’s
interest. The RRB can appoint a representative payee regardless of
whether there has been a legal finding of incompetence or commitment and,
depending on the circumstances in a particular case,
the RRB can select someone other than the individual’s legal representative to
be the representative payee.
2. What if a
person has been given power of attorney by a beneficiary?
Power of attorney is a legal process where one person grants another the
authority to transact certain business on his or her behalf; but the RRB, like
the Social Security Administration, does not recognize power of attorney for
purposes of managing benefit payments for a beneficiary. For this
purpose, the RRB uses the position of representative payee.
3. Why
doesn’t the RRB recognize power of attorney?
The Railroad Retirement Act protects a person’s right to
receive benefits directly and to use them as he or she sees fit by prohibiting
the assignment of benefits. Power of attorney creates an assignment-like
situation that is contrary to the protections given by this law. The Act
likewise gives the RRB exclusive jurisdiction in determining whether to appoint
a representative payee for an annuitant. If the RRB recognized power of
attorney, it would be deferring to a designation made by someone outside of the
agency and would, in effect, be abdicating its responsibility to the annuitant.
Also, events often occur which may affect an annuitant’s
eligibility for benefits. The responsibility for reporting these events
to the RRB is placed, by law, directly on the annuitant or the annuitant’s
representative payee. When benefits are accepted, the annuitant or his or
her payee attests to a continued eligibility for such benefits. And if
payments are misused, they can be recouped from the payee. This is not
true with power of attorney.
4. How
are these representative payees selected?
Generally, the RRB’s local field offices
determine the need for a representative payee and interview potential
payees. The field office also advises the payee of his or her duties,
monitors the payee, investigates any allegations of misuse of funds, and
changes the method of payment, or the payee, when appropriate.
The RRB provides 15
days’ advance notice to an annuitant of its intent to appoint a representative
payee, and the name of the payee, in order to allow the annuitant a period of
time in which to contest the appointment.
5. What
are the primary duties and responsibilities of a representative payee?
The payee must give first consideration to the annuitant’s day-to-day
needs. This includes paying for food, shelter, clothing, medical care and
miscellaneous personal needs. Beyond day-to-day needs, railroad
retirement benefits may be used for other expenses.
The payee is also responsible for reporting events to the RRB that affect
the individual’s annuity, and is required to account for the funds received on
behalf of the annuitant.
In addition, since railroad retirement benefits are subject to Federal
income tax, a representative payee is responsible for delivering the benefit
information statements issued each year by the RRB to the person handling the
annuitant’s tax matters.
Periodically, the payee will be asked to complete a report which includes
questions regarding how much of the railroad retirement benefits available
during the year were used for the support of the beneficiary, how much of the
benefits were saved, and how the savings were invested. In order to
complete the questionnaire correctly, a payee must keep current records of the
railroad retirement benefits received and how the benefits were used. The
records should be retained for four years.
6. What
are a representative payee’s primary responsibilities for an annuitant’s
Medicare coverage?
When an annuitant requires covered medical services, the payee must have
the annuitant’s Medicare card available. The payee must also keep records
of the services received and the expenses incurred or paid, just as for any
other usage of railroad retirement benefits.
7. What
if an annuitant is confined to an institution?
When annuitants are in a nursing home, hospital or other institution,
their railroad retirement benefit payments should be used to meet the charges
for their current maintenance. Current maintenance includes the usual
charges the institution makes for providing care and services.
The payee should use the benefit payments to aid in the annuitant’s
possible recovery or release from the institution, or to improve his or her
living conditions while confined. Payments may be used to provide such
items as clothing, personal grooming supplies, transportation of relatives to
visit the patient, trial visits to relatives, medical and dental care, and
reading materials and hobby supplies.
8. How
should railroad retirement benefits not immediately required
to meet an annuitant’s needs be handled?
Benefit payments which will not be needed in the near future must be
saved or invested unless they are needed for the support of the annuitant’s
legally dependent spouse or child, or to pay creditors under certain
circumstances. It is recommended that conserved funds be held in
interest-bearing accounts. Preferred investments are Federally-insured or
State-insured accounts at financial institutions and obligations of, or those
backed by, the Federal Government, such as U.S. Savings Bonds.
Funds should not be kept in the home, where they may be lost
or stolen, nor can they be mingled with the payee’s own funds or other funds.
9. How can a person
get more information about being appointed as a representative payee, or
whether the use of railroad retirement benefits for a particular purpose would
be proper?
More
information is available by visiting the agency’s web site, www.rrb.gov, or by
calling an RRB office toll-free at 1-877-772-5772. Persons can find the
address of the RRB office servicing their area by calling the RRB’s toll-free number or at www.rrb.gov.
Public Affairs 312-751-4777
Posted: 09/01/10