I've been taking care of my sister in my home for the last 3 years. I have a durable POA and she has dementia with Huntington's Disease. I called OPM to ask a question about her disability retirement check and they told me that they do not accept my POA even though it says that I can handle government benefits. Her check is direct deposited and I have been paying her bills and taking care of her needs with my name added to her acct as POA. Am I now in legal trouble with OPM because I didn't know that I needed to be a representative payee? Also, how do I pay her bills, buy her food and medical supplies in the meantime if I apply for representative payee while I am waiting for approval? Does anyone know how long the process takes? She has a good bit of money in her acct because I don't charge her living expenses.

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Talkey - if Sis does not have a fully paid funeral & burial pre-need done, I’d suggest you look into getting that done. You mention that her $$ built up, so paid up pre-need will take anywhere from 7-12k to do. It will be 1 less item to deal with for you in a time of stress. Floral isn’t included in most pre need but ask FH for the shops they deal with & I’d bet one will do a floral prepay.

Does she have a will & you as executor? If not & she still seems competent, you may want to have her meet with elder atty to update her legal & will & perhaps look into her doing a personal care contract between the two of you. And have her bank account set up to be POD - pay on death - to you. You too should speak with the atty as to what happens to you if say you got hit by a bus. What then for Sis? You can’t have her as your beneficiary as she can’t manage. You need to have a hit-by-a-bus plan if not one already done.
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Igloo572, thank you for your detailed answer. This is all good to know :)
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Unless you get a follow-up letter from OPM, so your on their radar, I’d just continue paying for all with the system you are currently doing. Leave all as the existing direct deposit and just continue to write checks or use a debit card to pay for her needs. And hope you never get a letter requiring a hearing on representative payee status. Rep payee is totally do-able but adds on a whole layer of paperwork with tight timeframes for you to deal with. 

My dad was a fed so mom got a spousal civil service retirement (annuity) via OPM and she also got SS. Everything was DD with me as a signature & POD on her checking account & it never came up as an issue with OPM or SSA. But you kinda have to do things so that your helping your family member do whatever needed by SSA or OPM without it being obvious that your “doing”. Like when my mom moved into a NH & became eligible for Medicaid, she needed to get her old federal BCBS suspended and there’s a whole set of forms OPM needs filled out to process the suspension. Forms are on-line & totally downloadable so mom didn’t need to ever call or talk to anyone at OPM on this. And I “helped” mom fill, check off and sign the forms and mailed paperwork off to OPM. Comprende?

Neither SSA nor the feds recognize POAs. But unless there is something that places you onto their radar, you shouldn’t ever have to deal with becoming a rep payee. 

Now if your flat just fretful worried about this, you can start a spreadsheet, like Excell or Quickbooks, to show where her $ has gone for last couple of years & have it all ready to go, along with her old bank statements if either SSA or OPM asks. Rep payee seems to be quite a formal process and they are going to want months of banking info to make sure your not taking advantage of her and will probably pull a credit check on you. If your not even charging rent or getting paid to caregiver, there should be no issue that all is above board Ok. Probably the biggest issue would be IF her income is being co-mingled with your income. By that I mean, her DD goes into a joint account where your income also goes. That is not allowed. She just needs to have her own bank account although you can be a signature on it.

If you end up being Rep payee, it has a reporting system that you will need to do annually. For a long time rep payee was usually only done for a parent who had minor child getting a benefit from deceased or disabled parent SS income. Now since so many elders are on Medicaid and have their monthly income go directly to the NH (as a rep payee) for the copay, rep payee is a real cottage industry for both SSA & OPM imo.
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