If someone you know is collecting Social Security but is unable to manage the funds (i.e. they have dementia) the Social Security Administration can appoint a representative payee (rep payee) to handle that person‘s Social Security payments. This person can be family, a friend, a neighbor, a fellow church attendee, etc.
The rep payee has to go through a screening interview with Social Security and open a checking or savings account for the benefit of the beneficiary. If Mary Smith is going to be the rep payee for John Jones, she would open an account as “Mary Smith for the benefit of John Jones”. Mary then becomes responsible for dispersing funds from the monthly Social Security payment. Those payments would be for food, clothing, rent and other things for John’s monthly maintenance.
There are a couple of interesting wrinkles to this. First, a power of attorney does not take the place of a rep payee. Someone can do both, but Social Security does not care about the power of attorney, a rep payee is a separate entity. A rep payee has to use the funds primarily for the maintenance of the beneficiary. For example, if a bill shows up to pay for the grandkids dental bill, the rep payee cannot pay it. The rep payee also cannot pay themselves from the account. They can receive reimbursement for real expenses (i.e. gasoline), but compensation is not allowed.
If you know someone who is struggling to deal with their Social Security income and you would like to help them out by becoming a rep payee, you can get lots of information at: