In my experience, when a judge suggests that a representative payee be appointed, although technically it is just a suggestion, as a practical matter the district office will do what the judge suggests. If the district office sent the person a letter saying that it would consider making him his own payee if his psych doctor wrote a letter saying he could be trusted to handle his own benefits, then he can do that if he wants.
If the main thrust of your question is to ask whether he would be endangering his benefits by becoming his own payee, that's a very good question. I think the answer is “Possibly, depending on the particulars of the situation.” The more his disability has to do with his mental capabilities, the more I would be concerned. That’s because the more capable he shows himself to be, the more functional he may appear to be when the time comes for SSA to re-evaluate his case.
Yes, this can be a difficult situation. However, usually judges don't suggest a payee unless there is a real danger that the person is going to blow the money. So even if a psych doctor says he can handle his money, it might not be the best for him.
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I agree. Judges almost never suggest a payee unless there is something in the records or hearing that concerns them about the person’s ability to handle their own finances. I would consider this more than a “suggestion”.
DISCLAIMER: David J. McCormick is licensed to practice law in the State of Wisconsin and this answer is being provided for informational purposes only because the laws of your jurisdiction may differ. This answer based on general legal principles and is not intended for the purpose of providing specific legal advice or opinions. Under no circumstances does this answer constitute the establishment of an attorney-client relationship.