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The Social Security Administration (SSA) and the programs administered by it can have a tremendous impact upon a guardianship case. From pensions to Medicare to survivor’s benefits, and more, the SSA can make a huge difference in the quality of life of a ward. While it is impossible to cover all areas in this short a paper, this paper will focus briefly on two misunderstood areas: Representative Payee and Disability claims.

A. REPRESENTATIVE PAYEE STATUTES — Often a proposed ward’s property consists of nothing more than a Social Security retirement check. It is not necessary to create a guardianship of the estate to manage Social Security funds. The SSA recognizes a representative payee status. 20 CFR §§ 404.2001, et. seq. To become Representative Payee, an applicant should file Form SSA-11-BK with the SSA. If the SSA determines that the applicant is a trustworthy person, the SSA will direct the funds of in incapacitated individual to the appointed Representative Payee. The Representative Payee is required to file annual reports with the SSA regarding the disposition of Social Security funds. However, the reporting requirements of a representative payee are substantially less onerous than those of a guardian.

B. SOCIAL SECURITY DISABILITY INSURANCE BENEFITS — Many individuals under guardianship qualify for disability insurance benefits (DIB) as a result of their mental or physical conditions. A guardian should apply for these benefits on behalf of a ward by completing an Application for Disability Benefits along with Form SSA-3368 and three copies of SSA-827 and filing these with the SSA. However, many applicants (if not most) are denied benefits upon their first application. The reversal rate upon appeal has varied over the last few years among files in our office from 60% to 90%. Not only should a guardian apply for benefits for a ward, they should pursue them through appeal. Further, the law allows for the payment of attorney’s fees in a successful DIB case.

A well known jurist had the following to say regarding Social Security law: “As program after program has evolved, there has developed a decree of complexity in the Social Security Act and particularly the regulations which makes them almost unintelligible to the uninitiated.” Friedman v. Berger, 547 F.2d 724 (2nd Cir. 1976) (Friendly, J.). However the practice of Social Security disability law involves a working knowledge not only of the statutes and regulations, but also of the rulings, the Program Operations Manual System (the POMS, which governs the district offices and state agencies), the HALLEX (which covers procedures in the hearing offices, and the Appeals Council) and case law. No brief introductory paper describing Social Security law and practice can hope to provide an intelligible overview of these areas of substantive law and procedure, much less describe the complex interplay of these materials with the actual handling of claimant’s cases at the district offices, the state agencies, the Offices of Hearings and Appeals, and the Appeals Council. Nevertheless, this paper will attempt a very abbreviated description of the basis process of applying for and receiving benefits.

C. THE ADMINISTRATIVE LEVELS — Applications for Social Security Disability or Supplemental Security Income can proceed through four administrative levels. The first level is the initial determination of eligibility which is performed by a state agency under contract to SSA. 42 USC § 421; 20 CFR §§ 404.1503 and 416.903. The notice of initial determination, whether a denial or a benefit award, comes from SSA. Once a claimant receives the denial notice, they have 60 days from the date of receipt of the decision (receipt within 5 days of mailing is presumed) to file a request for reconsideration. 20 CFR §§ 404.907, 404.909, 416.1407, 416.1409. Reconsideration of the initial denial is also conducted by the state agency. Once the claimant receives notice of denial on reconsideration, it is time to request a hearing. The request for hearing must be filed within 60 days of receipt of the denial notice, with receipt of the notice presumed to have occurred within 5 days of mailing. The Administrative Law Judge hearing is de novo, and is the first stage in the administrative process where the claimant actually meets personally with an adjudicator.

In the event of an unfavorable decision or partially favorable decision by the Administrative Law Judge, the claimant may appeal to the Appeals Council within 60 days of receipt of the unfavorable or partially favorable ALJ decision, with the same 5 day presumption regarding receipt of the decision. 20 CFR §§ 404.967, 416.1467. In general, a claimant must proceed through all four administrative levels, including an appeal to the Appeals Council, in order to have a further appeal into Federal District Court.

D. THE FIVE STEP SEQUENTIAL ANALYSIS — Disability, for adults, is generally defined as: “Inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.” 42 US (§ 423 (d)); 20 CFR § 404.315. SSA Regulations establish a five step sequential process for evaluating disability. 20 CFR §§ 404.1520, 416.920. (Note that the process is significantly different for children seeking SSI benefits. See 20 CFR §§ 416.924 - 416.924(e)). The steps in the process are:

STEP 1: SUBSTANTIAL GAINFUL ACTIVITY. If the claimant is earning more than $500.00 per month, the work activity is presumed to be substantial gainful activity (SGA), and the claimant is considered not to be disabled. If the individual is earning less than $300.00 the activity is presumed not be SGA. If the individual earns between $300.00 and $500.00 per month, the Administrative Law Judge will determine whether the work activity constitutes SGA. 20 CFR § 416.974. There are a number of other significant rules regarding SGA that are based on other factors, such as type of work (sheltered, self-employed) and length of employment (unsuccessful work attempts, trial work periods and periods of reentitlement). A thorough review of these is warranted in any situation where the client has worked.

STEP 2: SEVERE IMPAIRMENT. The claimant’s impairments must significantly limit the physical or mental ability to perform basic work activities. If the limitations represent only a minor inconvenience, the claimant will be found not disabled at step 2. 20 CFR §§ 404.1521, 416.921.

STEP 3: LISTING OF IMPAIRMENTS. If the claimant can demonstrate an impairment which meets the 12-month duration requirement, and which either meets or equals a listing in Appendix 1 - The Listing of Impairments, the claimant will be found disabled at step 3. 20 CFR §§ 404.1525, 416.925. The Listings are “pigeonholes” which describe conditions existing at such a severe level that individuals who can demonstrate they meet the specific requirements of the listing are considered disabled without consideration of their age, education or prior work experience. The listings are extremely detailed, and deserve careful review.

STEP 4: PAST RELEVANT WORK. If the claimant gets past the first two steps of the sequential analysis but does not meet or equal a listing, the Administrative Law Judge will determine whether the claimant can perform any of the jobs that the claimant performed in the 15 years prior to the date of application. If so, the claimant is not disabled.

STEP 5: ABILITY TO PERFORM OTHER WORK. If the claimant cannot perform any of the prior work, the final issue is whether, considering the claimant’s age, education and past work experience, there are any other jobs which exist in significant numbers in the national economy that the claimant could perform. The burden is on SSA to show the jobs; however, the question is not whether the claimant can be hired, but whether, if hired, could the claimant perform any of the enumerated jobs.

E. THE DAA STEP — Recent legislation has added a de facto sixth step to the process, which is a determination of whether the individual is disabled due to alcoholism or substance abuse. That is, if drug abuse or alcoholism is a “material factor” in disability, the claimant is not disabled. If the claimant can demonstrate that he would be disabled, even if the substance abuse or alcoholism did not exist, the fact that the claimant is an alcoholic or substance abuser will not prevent his or her receipt of benefits, but the benefits will be paid through a representative payee.

F. TYPES OF CASES — The primary types of disability cases which you will encounter are claimants seeking either Social Security Disability under Title II of the Social Security Act, or Supplemental Security Income under Title XVI of the Social Security Act. Many potential clients will have “concurrent” claims, consisting of both Title II and Title XVI claims. In order to qualify for Title II disability benefits, an individual must have worked in the past and accumulated sufficient “quarters of coverage”, or be a disabled widow(er), or disabled adult child of an insured individual. Supplemental Security Income benefits do not require any prior employment, or quarters of coverage, however they do require that the individual be at poverty level.

When a claimant files for a disability benefit at a Social Security District Office, the claims representative will ensure that they apply for whatever programs they may be eligible. However, it is important to become familiar with the qualifications for the various programs, since the district office does sometimes make mistakes, and because the situation of the claimant may change. For example, if you are representing (at the hearing level) a Title II claimant, who was initially ineligible for SSI due to excess resources, and you learn that client’s long wait for disability benefits has caused an increasing level of poverty that now meets the test of the SSI program, it is your obligation to submit a letter to that effect for the file, thereby protecting an SSI application date.

The rules regarding eligibility for the various disability programs administered by the Social Security Administration are detailed and specific. Because the eligibility rules for these programs are readily available from a number of sources, they will not be discussed in detail here. However, some practical pointers regarding the advisability of accepting the various types of cases are as follows:

SOCIAL SECURITY DISABILITY CLAIMS — Also known as Title II or “DIB” claims. These cases are sought after by practitioners, since they typically involve a substantial back award of benefits, and also because, if the representative is an attorney, SSA will withhold the fee and pay it directly to the attorney. For screening purposes, Disabled Widow(er)’s Benefits and Disabled Adult Child’s Benefits cases should be evaluated in the same manner as Social Security Disability claims. Also, Railroad Retirement disability cases are desirable claims to handle, although the attorney’s fees are not withheld in these cases.

CONCURRENT CLAIMS -- These cases are also sought after by practitioners, since they provide for direct payment of the attorney’s fee on the Title II portion of the case. The fact that the case also includes a Supplemental Security Income claim allows a second way to win the case, where there is a “Date Last Insured” (DLI) in the past on the Title II claim. Thus, it is not uncommon for an Administrative Law Judge to find that the claimant is disabled, but did not become disabled until after the claimant’s DLI. Therefore, the claimant is entitled to Supplemental Security Income benefits only, from the month after the onset of disability or the first full month after the month in which the SSI claim was filed, whichever is later.

SUPPLEMENTAL SECURITY INCOME CASES — Many attorneys avoid representing claimants in SSI-only claims, primarily because the attorney’s fees are not withheld, and the attorney must look to the claimant for payment of the fee. The fee situation in SSI-only cases has been further complicated by the fact that SSA now pays larger back awards on an installment basis. The first installment check will be in the amount of one year of SSI benefits calculated at the maximum rate. Thereafter, a second check is sent six months later, and a final check, if needed, is sent six months after that. Although many clients are willing to pay the entire attorney’s fee out of the first installment check, many are reluctant to do so.

CHILDREN’S SSI CASES — Children can also qualify for Title XVI disability benefits, but their cases are evaluated differently than adult SSI claims. In recent years, the Congress and SSA have “tightened up” the rules for allowing these cases, causing a substantial number of practitioners to reduce the number of children’s SSI cases they accept, or even to stop taking them entirely. While we screen these cases in our office very carefully, we do still accept children’s SSI cases.

Excellent training materials regarding children’s SSI cases are available from various sources, including the Bazelon Center for Mental Health website at: You can write to them at 1101 15th Street NW, Ste. 1212, Washington, D.C., 20005-5002. The fax number is (202) 223-0409. In addition, pro bono projects throughout the country provide an opportunity for novice practitioners to gain actual experience in representing disability claimants before SSA, while also assisting children who desperately need representation. For more information, contact the Children’s SSI Project of the Illinois Pro Bono Center-

CESSATION CASES — These cases are evaluated on an entirely different standard from Social Security Disability and SSI claims, and require a threshold showing by SSA that there has been “medical improvement” in the claimant’s case. Individuals who receive notice that their benefits may cease are provided an opportunity to have their benefits continued during the pendency of their appeal. However, at each level of the appeals process they are allowed only 10 days after notice of the cessation to request that their benefits continue. Accordingly, if you are contacted by a cessation claimant you should immediately advise them (or their guardian) to provide written notice to SSA that they wish for their benefits to continue.

OVERPAYMENT CASES — Overpayments can occur for a variety of reasons, including the failure of the claimant to report work activity, miscalculation of the back award due to a lack of information regarding worker’s compensation benefits, and other causes. Aside from the factual determination of whether the overpayment has been calculated correctly and is, in fact, owed to SSA, the claimant also has the opportunity of seeking a waiver of liability for the overpayment by demonstrating that they were not at fault in causing the overpayment, and that it would create a hardship for them to repay the amount involved, or that it would otherwise be inequitable and unfair to require repayment.


The Health Care Financing Administration has recently implemented a program of particular use to guardians. The Administration has posted the inspection reports of all licensed nursing homes who receive Medicaid on its web site. The web site is I encourage guardians to check the inspection reports on this web site prior to making placement decisions.


Particularly in San Antonio, many wards are veterans and can obtain substantial benefits through the Veterans Administration. The VA provides medical care through a series of local and regional hospitals. Additionally, the VA’s Field Representatives check on disabled veterans and can provide a wide variety of living arrangements, including nursing homes and boarding homes. Further, monthly disability benefits are available to eligible veterans, their dependants and survivors in amounts that can range up to $5,000.00 per month.

If a veteran is incapable of managing their own affairs, a fiduciary is required. The Veterans Administration recognizes two types of fiduciaries: 1) the federal legal custodian and 2) the court appointed guardian. Regardless of whether the fiduciary is acting as a custodian or a guardian, the VA is required to supervise the use of funds to insure that they are being used for the beneficiary. 38 CFR 13.100

A. THE FEDERAL LEGAL CUSTODIAN — A federal legal custodianship is very similar to the representative payee status issued by the Social Security Administration. Under the custodianship process, a veteran’s service officer (field representative) at the regional office is authorized to determine who will receive VA benefits on behalf of a beneficiary who is incompetent, or under legal disability by reason of minority or court action. 38 CFR 13.58 As with Social Security, the VA requires annual accountings. Unlike the Social Security Administration, the VA supplements its supervision of beneficiaries with field examinations. Part of the purpose of a field examination is to insure that satisfactory accounting of receipts and expenditures is occurring, that funds are being used for the benefit of the beneficiary and that the custodian is exercising his duties in accordance with the law. 38 CFR 13.000(c) In addition to the power of appointment, the field representative may remove the custodian and replace him or her for failure to serve the best interest of the beneficiary. 38 USC 5502; 38 CFR 13.100 (a)(2) Payment of a custodian differs from the standard guardianship commission. A custodian may receive 4 percent of the gross income paid to the veteran from the Veterans Administration. There is no commission allowable for expenditures made on behalf of the ward.

B. THE COURT APPOINTED GUARDIAN — The VA may also recognize guardians appointed under Texas law. 38 CFR 13.59(b) However, as a Federal agency the supremacy clause makes it clear that the Federal agency is not required to recognize State action appointing a guardian. If a proposed ward is a veteran, receiving substantial veterans benefits, the regional office should be contacted prior to, or shortly after, the initiation of the guardianship to insure that the VA will recognize the State guardianship. In this way, attorneys’ fees and costs can be avoided should the VA decide not to recognize the guardianship.

If the veteran has adequate funds, the cost of creating the guardianship can be paid from the veteran’s estate as in any other guardianship. If funds are inadequate, the VA regional counsel will file for guardianship or will retain private counsel and incur the costs of private counsel on behalf of the veteran.

Federal law requires that the VA supervise the use of all VA funds in the guardianship. 38 USC 5502. Therefore, whenever an application to expend funds, or invest funds, or when a claim against the estate of the ward shall be filed, the regional counsel must be given an opportunity to review the filing and appear at the hearing. TPC §636. The vast majority of such applications can be mailed or faxed to the VA Regional Counsel for a VA waiver. Filing the application with the VA waiver complies with both Texas and Federal laws. In the event the VA refuses a waiver, §636 establishes special notice provisions to the VA before the matter can be heard in the Texas Probate Court.

C. A PERSON FOR WHOM GUARDIANSHIP — In some situations, the VA determines that the appointment of a guardian is a condition precedent to the payment of funds from the VA. In such a situation the Veterans Administration’s Regional Counsel will issue a certificate that a guardianship is necessary. This certificate is prima facie evidence of the necessity for the appointment of a guardian. The guardian appointed under this procedure has the power to administer only the funds received from the VA, plus all interest or profits the VA funds generate. “A Person For Whom Guardian” is not considered a general guardian of the estate of the beneficiary. TPC §684(e).

D. CLAIMS AGAINST VA FUNDS — Veteran’s benefits are to be used by the veteran. Therefore, they are provided with substantial protection against creditors. Pursuant to Federal law, 38 USC 3101, veteran’s benefits are not assignable, except to the extent specifically authorized by law. They are exempt from taxation and claims of creditors. They are not liable to attachment, levy nor seizure by or under any legal or equitable process whatsoever, either before or after receipt by the beneficiary. Of course, VA funds are not exempt from claims of the Veterans Administration. Also, the exemption as to taxation does not extend to property purchased with VA funds. For example, VA funds are exempt from taxation, but if they are used to purchase a home, ad valorem property taxes on the home would have to be paid.

VA benefits are not subject to garnishment under the Federal Child Support Enforcement Act. 42 USC 662 (f)(2). Also, if military benefits are waived in order to receive VA benefits, the VA benefits are not subject to garnishment under the Federal Child Support Enforcement Act. Veterans Administration v. Kee, 706 S.W.2d 101 (Tex 1986).

E. DEATH OF THE VA WARD — If there are no heirs or legal representatives to receive the funds of the deceased ward which are derived from the VA, the funds escheat to the United States. Federal law requires the funds to be returned to the Federal government rather than the normal procedure set forth in the Probate Code. The legal expenses of administration to determine that a Federal escheat is in order may be paid from the funds by the guardian or representative. 38 USC 5502(e).

If a veteran or beneficiary dies while receiving care in a VA facility, or being furnished care or treatment by the VA, and leaves no heirs under Texas law, all of his personal property including money, and any causes of action owned by him at the time of his death and not disposed of by will, will immediately vest in and become the property of the United States. 38 USC 5220.

F. CONCLUSION — A guardian administering a guardianship over a disabled veteran must be aware that some Probate Code provisions are altered and that Federal law is involved in the administration of the guardianship. When in doubt, contact the VA regional counsel. The San Antonio metropolitan area is covered by the Houston Regional Office: U.S. Department of Veterans Affairs, Office of Regional Counsel, 6900 Almeda Road, Houston, Texas 77030, (713) 794-3656.


The problems of incapacity are not limited to the United States. Every country will sooner or later face these same issues. Potential problems have even emerged between countries, with regard to issues of incapacity. For example, does a guardianship proceeding established in the United States provide the American court appointed guardian with authority over the property in another country? Should medical and financial powers of attorney executed in one nation be recognized by another?

Countries are beginning to address these issues, and negotiations have finally been completed amongst countries at The Hague on September 20, 1999. A treaty entitled “Special Commission of a Diplomatic Character on the Protection of Adults” has been negotiated by the U.S. State Department with twenty-three countries and is currently pending before the Senate for final advice and consent. At this time, no hearings on the treaty have yet been set. A copy of the proposed treaty is attached in Appendix F.


When I first began serving as guardian, I had almost nowhere to turn when problems developed. Very few attorneys were familiar with guardianship and the Probate Code sections covering guardianships were archaic in nature. There was no training, no professional organizations and virtually no written materials on guardianships. Today, many organizations exist to assist guardians in making proper decisions for their wards. All guardians should be aware of these organizations and the resources and information they can provide. When a problem arises, it is not necessary for a guardian to reinvent the wheel. Help and guidance is available to the guardian who will simply ask. I hope that this paper will provide both professional and family guardians with assistance in meeting the needs of our most vulnerable citizens.

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