• Tonia

Third time's the charm? The trials of setting up a bank account to accept social security payments

A law firm shepherded me through the social security application process and I am happy to say that, because of that, things went pretty smoothly. The law firm started the application process and told me to expect a phone interview within about a month after the initial application was filed. The phone interview was scheduled and took less than an hour. Then I received a document that listed the answers I had given over the phone and I was asked to verify them in writing. Done. Then it took about six weeks before I received a written notice that the application for Social Security Income (SSI) had been approved. Voila! Except . . .

It took me six more months to actually get the bank account set up correctly.*

I initially went to the local credit union where I have had an account for years and where Morgan already had an account. I told them that I needed to set up an account to hold Morgan’s social security payments. They reviewed the guardianship documents which I brought with me. Because financial management was not specifically listed in the guardianship powers, however, I could not open an account to accept the social security payments. They would, however, let me take all of the cash out of the account he already had in his name! Made no sense to me, but I still had to find a solution for the social security payments, so I went somewhere else.

I have been a member of another financial institution for a long time and have both insurance and bank accounts with them, so I went online to see what I could do. In under a minute, I was able to open a joint account for me and Morgan. I moved the cash that had been in his account at the credit union (you know, the place that let me take all of his cash!) into this new joint account. I gave the account number to the Social Security Administration and asked for direct deposit of his payments. Immediately after he was approved for SSI benefits, the money was deposited into this account. Whew! Except . . .

When I received all of the documents in the mail about his approval of SSI, there was a handbook for Representative Payees – the official name for the person who is accepting SSI payments and paying for things on behalf of Morgan. In reading the handbook, I learned some new things. First, you can’t mix together in one account SSI funds and funds from any other source. So that money that I had taken out of the credit union account and put into this new account to set it up was now mixed together with his first direct deposit of SSI funds. Oops. Second, even if the account holds only SSI funds, it can’t be a joint account. Oops. It has to be set up as an account for the benefit of Morgan, but he can’t have direct access to it as he would with a joint account. So I called the bank and explained what I was trying to do. They sent me a form. I completed it and we set up a second account for the benefit of Morgan from which I could write checks on his behalf. I moved JUST the SSI funds from the first account to the second account so I was keeping the SSI money separate from everything else. Whew! Except . . .

The more I read and the more I looked at how the second account was set up, something didn’t seem right to me. It was set up with me as the "owner" of the account but it said “Transfer on Death,” which meant that it was my money and would go to Morgan when I died. Hmmm . . . could that be right? I called the bank and once again explained again that I was trying to set up a "Representative Payee" account. Those were the magic words! She knew exactly what I meant and sent me another form, which I completed and the bank set up a third account. It was done correctly and I finally had the right account set up for Morgan’s social security money

I contacted the Social Security Administration (SSA) to change the account number for direct deposit (which, unfortunately, is one of the few things you can’t do online!) and talked to a very helpful person who said that his next check would be deposited in the old account because I had missed the deadline (of course!), but the following month it would go into the correct Representative Payee account. She told me to wait to verify that the money went into the new account before closing the incorrect account. So now the account was set up correctly and soon I’d have a clean account with just the SSI funds in it. Except . . .

The next payment went into the old account (which the SSA employee had told me to expect). I waited until the next month – and that payment also went into the old account. I called SSA again and spoke to another very helpful employee. There was no record of the request I made in January to change the direct deposit account – apparently, the employee I talked to in January was NOT as helpful as I thought! Once again, I went through the old and the new account numbers on the phone and was told to expect the next payment to be deposited in the correct Representative Payee account. I’m happy to say that it was. After almost seven months, I think I finally have it right.

But why did it have to be so difficult in the first place?

* I do want to note that I could have hired someone to do this for me. There are people who are professional representative payees and (I hope) know how to navigate the system and do this right the first time. But they charge about $50 per month and that’s money that people on SSI don’t have to spare.



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