If a loved one, friend or neighbor receives Social Security or Supplemental Security Income (SSI) benefits but is no longer physically or mentally able to take care of his or her financial affairs, you may want to consider becoming a representative payee. Then, you’ll be able to help them with managing their money.

Keep in mind that having power of attorney is not the same as being a representative payee. Even if you do have power of attorney, you will need to apply to be a representative payee in order to have the benefit payments made to you on the beneficiary’s behalf.

When the Social Security office learns that a person is no longer able to handle his or her own Social Security or SSI benefits, a careful investigation is conducted, and a relative, friend or other interested party is appointed to serve as the representative payee. This means that the recipient’s benefits are paid to the appointed person to use on his or her behalf.

The representative payee is responsible for using the benefit payments to help meet the basic needs of the beneficiary. Primarily, the funds should be used to provide food, clothing, shelter, utilities and other essential needs for the person eligible for benefits. A representative payee must be aware of the beneficiary’s needs in order to decide how the benefits can best be used for his or her personal care and well-being.

Each year, Social Security will mail the appointee a form to account for the benefits that have been received. The quickest and easiest way to complete the form is online, at www.socialsecurity.gov/payee, or a paper form can be completed and returned to the Social Security office.

A representative payee will also need to tell Social Security about changes that may affect the beneficiary’s eligibility. This includes changes in living arrangements, other income and resources.

More than seven million people who get Social Security or SSI payments each month have a representative payee because they need help managing their money. Agreeing to serve as a representative payee is an important responsibility — one that can make a positive difference in both the beneficiary’s life and your own.

For more information see the online booklet, A Guide For Representative Payees, available on the Social Security website at www.socialsecurity.gov/pubs/10076.html.