Procedure To Handle A Social Security Deposit Made By A Nursing Home

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Question:

We have a Nursing Home that makes regular deposits with checks from Social Security. These checks are payable to residents, but only endorsed by the home. For health reasons, most of these people are unable to sign. What is the proper procedure to handle these items?

Answer:

It's possible for a nursing home to be named representative payee by the Social Security Administration. Without that designation, however, they have no business taking those checks without an endorsement of the payees, and you are accepting them for deposit with the potential that the payees or their legal representatives might lodge a claim with social security such that the checks will be bounced back to you. Will the nursing home still be there at your bank for charge-backs months from now?

You should also know that the folks at Social Security don't recognize powers of attorney, so don't get duped into assuming that a POA naming the nursing home will take care of matters for you.

First published on BankersOnline.com 2/3/03