ANCHORAGE, Alaska (AP) - The Social Security Administration has tightened regulation of Alaska’s representative payee businesses, saying they operate outside the law by charging fees to handle money for disabled residents, officials said.
For-profit payee services have been notified their business model is illegal and they face audits, The Anchorage Daily News reported Thursday.
“Through our monitoring program, we have identified several for-profit representative payee organizations in Alaska that may be charging unauthorized fees,” Social Security Administration spokeswoman Ann Mohageri said in an email.
Congress passed a law in 2018 that expanded monitoring of the businesses that have existed in Alaska since the 1990s.
The companies take monthly fees to manage benefit payments for clients and coordinate expenditures such as rent payments and grocery purchases.
The businesses have been told to convert to nonprofits, which will prevent them from charging more than $43 per month.
That is about half of what most of the businesses charge. A few have already closed, while others said they will soon, managers said.
“We have to shut down. We can’t do it for free,” said Terria Ware, who operates a representative payee business for about 80 people across Alaska.
About 800 vulnerable Alaskans could be left without someone to help manage their money, including people with physical or developmental disabilities, mental illnesses or age-related cognitive problems, advocates said.
There are no clear answers about what will happen next, or how soon, but there are not enough nonprofit or government organizations to fill the gap, said Dave Fleurant of the Alaska Disability Law Center.
“I’ve been trying to convey to the Social Security Administration for a while that this is more of a crisis than they see it as,” Fleurant said.
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Information from: Anchorage Daily News, http://www.adn.com
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