Payee and ABLE Accounts


More than eight million people who get monthly Social Security or Supplemental Security Income (SSI) benefits need help managing their money. In these cases, we appoint a relative, friend, or other interested party to serve as the representative payee (payee).

A payee must use the benefits received on behalf of the beneficiary to meet the beneficiary’s current and future needs. Any funds that the payee does not need for the beneficiary’s needs must be saved.

A payee has options for how to use and save funds in the beneficiary’s best interest. One option that a payee may choose is to place the beneficiary’s funds in an account established under the Achieving a Better Life Experience (ABLE) Act of 2014, better known as an ABLE account.

This site offers basic information on how a payee may use an ABLE account to manage benefits while following our program rules. If you have other questions or need specific information about your situation, you should talk with a Social Security representative at your local Social Security office.

Representative Payees and Their Responsibilities

When we determine that a beneficiary is unable to manage or direct the management of benefits, we appoint a payee. The payee manages the benefits on the beneficiary’s behalf. A payee’s main duties are to use the benefits to pay for the current and future needs of the beneficiary and properly save any benefits not needed to meet current needs.

The payee must:

  • Determine the beneficiary’s needs and use benefits to meet those needs;
  • Save any money left after meeting the beneficiary’s current needs in an interest bearing account or savings bonds for the beneficiary's future needs;
  • Report any changes or events which could affect the beneficiary's eligibility/entitlement for payments;
  • Keep records of all payments received and how they were spent or saved;
  • Provide all records of how payments are spent or saved to SSA upon request;
  • Report to SSA any changes that would affect the payee’s performance or ability to continue serving as payee;
  • Complete reports accounting for the use of payments, as required;
  • Return to SSA any payments to which the beneficiary is not eligible or entitled; and
  • Return to SSA any payments saved when the payee no longer serves as payee for the beneficiary.

The U.S. Department of the Treasury generally requires all federal benefit payments to be made using a form of electronic payment. Most payees have benefits deposited directly into a checking or savings account. Payees may also choose to hold benefits in an ABLE account.

ABLE Accounts

An ABLE account is a type of tax-advantaged account. By using an ABLE account, a payee can save funds for the disability-related expenses of the beneficiary. To qualify for an ABLE account, a beneficiary must be blind or disabled by a condition that began prior to his or her 26th birthday.

The designated beneficiary must be one of the following:

  • Eligible for SSI based on disability or blindness that began before age 26.
  • Entitled to Social Security Disability Insurance (SSDI) Benefits, Childhood Disability Benefits (CDB), or Disabled Widows or Widowers Benefits (DWB) based on disability or blindness that began before age 26.
  • Someone (or an individual selected by that person) who has certified, or whose agent, conservator or legal guardian, spouse, parent, sibling, grandparent, or payee has certified, that he or she is disabled or blind by a condition that began before age 26; and for whom a physician has signed a copy of the diagnosis relating to the relevant impairment(s).

Funds from ABLE accounts can help designated beneficiaries pay for “qualified disability expenses” (QDEs). A QDE is any expense the beneficiary incurs that relates to his or her blindness or disability, including expenses that are for the benefit of the beneficiary in maintaining or improving health, independence, or quality of life. QDEs include basic living expenses as well as expenses related to education, housing, transportation, employment training and support, assistive technology, personal support services, healthcare, and financial management and administrative services. Funds used for QDEs are disbursed tax-free. Some states also allow tax credits or deductions for contributions to an ABLE account.

If the beneficiary receives SSI benefits, there are additional rules to follow. The first $100,000 in the ABLE Account is exempt from the $2,000 individual resource limit for SSI. If the ABLE Account exceeds $100,000 by an amount that causes the recipient to exceed the SSI resource limit, SSI benefit payments are suspended until the ABLE account balance no longer causes the recipient to exceed the resource limit. Even if SSI benefits are suspended, a beneficiary may still receive or be eligible for medical assistance through Medicaid.

The provisions of the ABLE Act are principally under the jurisdiction of the Internal Revenue Service (IRS).  The ABLE Act added section 529A to the Internal Revenue Code (26 USC 529A), which authorizes the establishment of ABLE programs and accounts. States establish and maintain the individual ABLE programs.

Managing Benefits in an ABLE Account

Payees who choose to place benefits in an ABLE account must follow our general rules for all payees. This section provides general guidance to assist payees with using an ABLE account to manage benefits on the beneficiary’s behalf.

  • Account Titling

The payee must title the ABLE account to show that the payee has a fiduciary interest in the funds. The account title must show that the beneficiary owns the funds, but has no access to them.

We recommend that the account be titled in one of the following ways:

  • (Beneficiary’s name) by (payee’s name), representative payee.
  • (Payee’s name), representative payee for (beneficiary’s name).
  • Signing Authority

The designated beneficiary of the ABLE account may remove and replace any person with signature authority over the designated beneficiary’s ABLE account. Payees are responsible for reporting to SSA any events affecting their ability to fulfill the responsibilities of being a payee. If a payee uses an ABLE account for the SSA beneficiary served, and if the beneficiary removes the payee’s signature authority over the ABLE account, the payee must immediately alert SSA. In that case, the payee would no longer have control over the benefits placed into the ABLE account, and the payee would need to change the direct deposit of the benefits and no longer use the ABLE account. 

  • Use of Benefits

The payee must determine the beneficiary’s current and future needs and use the benefits to meet those needs. The payee must save any money remaining, after meeting the beneficiary’s needs.

Funds in an ABLE account generally are meant to assist a person in the purchase of items and services that are covered as QDEs. If funds are used for non-QDEs, a portion of the investment earnings included in the distributed funds will be includible in income and subject to a 10 percent additional tax. Additionally, funds used for housing and non-QDEs are subject to the SSI resource-counting rules if retained into the month or months after they are withdrawn from the ABLE account.

Prior to placing benefits into an ABLE account, a payee must make sure that they understand the IRS’ tax rules and consequences of spending the beneficiary’s ABLE funds on non-QDEs. 

  • Recordkeeping

Payees are responsible for keeping records and reporting on how they spend the benefits. Payees report on the use of benefits by completing a Representative Payee Report (Form SSA-623, SSA-6230, or SSA-6233). We mail the form to the payee once a year. Payees can also file the report online. Payees must complete the report, unless they are exempt. The following types of payees are exempt from the annual accounting requirements:

  • A natural or adoptive parent of a minor child who primarily resides in the same household as the beneficiary;
  • A legal guardian of a minor child who primarily resides in the same household as the beneficiary;
  • A natural or adoptive parent of a disabled individual who primarily resides in the same household as the beneficiary; and
    • The spouse of an individual.

All payees must also report on the use of benefits to SSA upon request.

Payees must keep detailed and accurate records of how they use benefits. IRS may request information about the use of funds in the ABLE account, so payees should maintain adequate records for determining and supporting the designated beneficiary’s qualified disability expenses for each taxable year.

ABLE accounts, however, may hold funds from a variety of sources, and there may be incentives to encourage contributions from the beneficiary’s family and friends. Generally, we do not recommend that a payee mix benefits with other funds that belong to the beneficiary. If the payee chooses to mix benefits with other funds that belong to the beneficiary, the payee must maintain a recordkeeping system to differentiate SSA benefits from other funds.

  • Investing Conserved Funds

ABLE accounts offer options for payees to grow beneficiaries’ funds through investing. The available investment options present varying risk levels. If a payee chooses to invest funds in an ABLE account, he or she must do so carefully. After meeting the beneficiary’s current needs, the payee must conserve any remaining funds. Payees must comply with SSA’s rules on conservation and investment of benefit payments.

  • Returning Conserved Funds

When a payee no longer serves as payee for a beneficiary, they are responsible for returning any funds saved on the beneficiary's behalf. Generally, we require the payee to return the conserved funds to SSA, and we will reissue the funds to the new payee or directly to the beneficiary, if they no longer need a payee.

On a case-by-case basis, SSA may also permit the former payee to transfer the funds directly to the new payee or beneficiary. When the beneficiary's funds are conserved in an ABLE account, it may be in the beneficiary's best interest to seek SSA's approval to transfer conserved funds directly by changing the signature authority for the account to the new payee or beneficiary. This approach eliminates the need to remove the funds from the ABLE account. Payees should contact their local Social Security office to discuss transferring conserved funds directly to the new payee or to the beneficiary.

If SSA does not approve the direct transfer of the funds or if the new payee or beneficiary does not intend to hold the funds in the ABLE account, the payee will need to remove the conserved funds from the account. In this situation, removing the funds from the ABLE account is considered a QDE. However, if the new payee or beneficiary decides to deposit those funds back into an ABLE account, the funds will count towards the annual contribution limit. For this reason, payees should consider transferring control of the ABLE account to the new payee or to the beneficiary, when appropriate.

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