Can the CEPS Program Benefit You?

CEPS is program that is probably not well known by a lot of landlords or investors. In fact, I only heard about it for the first time this year and still wasn’t fully aware of how the program works. After dealing with a tenant who qualifies for CEPS, I began to look into the program and found some interesting information that I thought could benefit any landlords who come across potential tenants who plan to use CEPS to pay the rent.

WHAT IS CEPS? It is a program that helps social security recipients with bill paying. The acronym stands for “Consultants in Education & Personal Skills”. Basically, once a person is able to qualify to receive Social Security, they can contract with CEPS to help them pay their bills. They also communicate directly with Social Security on behalf of the recipient to help resolve issues or review their existing services and help be an advocate for them in any issues having to do with S.S. The ways it works that Social Security sends the money directly to CEPS, who in turn send out the money to any creditors the recipients have listed. It’s like a bill paying service for those who may have problems budgeting their own money and need help dispersing their funds. In a nutshell, what it means for landlords and property managers is that typically you will get a check every month like clockwork from CEPS.

Beware however, as there is not a set amount they send each month. They talk with the tenant each month and they decide how much money will be sent to each creditor. After they have paid the creditors, the remaining balance is then put into a saving account on behalf of the social security recipient – this is their spending money for the rest of the month. This means that whatever they decide will be sent to you is what you get from CEPS – if that doesn’t cover the whole rent then you will have to collect the balance from the tenant yourself.

While the program has the advantages of sending your payment rent directly to you each month automatically, there are a few caveats to look out for. As I mentioned previously, they decide each month how much you will get, based on what the tenant tells them to pay you, so if they decide they don’t want to pay the full amount, you are left trying to collect it from them directly.

The program basically acts as a mother who controls the purse strings for their children who do not know how to manage their finances on their own. The Social Security recipients are given some leeway to decide where to send the money, but there are still some restrictions on how it is dispersed. Also, if there is more than one tenant, they will only pay that tenant’s share of the rent.

For example, if the rent is $800 and your tenant has a roommate – CEPS will only pay up to $400 towards the rent. But wait – there’s more. That is the max they will pay, not the minimum – so while they will pay up to $400 towards the rent, they may just as easily pay only $100 if that’s what the tenant told them to send you.

What do landlords need to do to qualify and start receiving CEPS payments? Nothing. Except renting to someone who is contracted with them. There are no inspections like with Section 8. There is no paperwork to fill out other than a rental contract. The tenant takes the contract to CEPS, who then call you to confirm that you are a landlord. After that, the checks start coming in each month. They will even send out the deposit. They are typically in your mailbox by the 1st of the month. In some cases, it may be a few days after the 1st depending on how backed up the post office is. You can even set it up so that the rent is deposited directly into your bank account so that you do not need to wait for the mail.

So, should you take on a tenant who is on CEPS? It all depends on how you screen and what type of tenants you’re looking for. You can’t judge a tenant based on getting S.S. unless they don’t get enough to cover the rent, but something to keep in mind is this – usually Social Security payments are for life. If the tenant is on S.S. and has a bill payment company that pays their bills for them every month – there could be a good chance that you will continue receiving your payments each month. Keep in mind however, that if the tenants get upset with you and cancel future payments – they will not get disqualified from the program as section 8 does. There are also no requirements that they keep the unit in good condition to continue their qualifying status. The money is already “theirs” – CEPS just distributes it for them. Now, how do you feel about having tenants who might have “an entitlement attitude”? That’s fodder for another article. Many landlords feel that people who receive benefits for a living have a different attitude about what is “owed to them” and what the landlord should be doing for them. I believe each person must be evaluated on their own situation and as long as they have the income to qualify and they do not have criminal records or evictions in their history, I’m willing to take a chance on them.

CEPS is a legitimate program – but remember that it is not a welfare or section 8 program. You are not guaranteed to get paid, but you have a little more assurance that they have the income and a means to pay it on time each month. If a prospective tenant comes to you and tells you they get CEPS, get the number of their contact and speak with them yourself. They will answer all your questions on how the program works and give you an idea of what to expect from it. Unfortunately, there is not a lot of information about the program online – you would probably need to speak with a counselor to get a better idea of how the program in its entirety works.

I just wanted to share this with info with landlords and managers because when I first heard about the program, it was completely foreign to me. I have had personal success with the program myself for the last 6 months, receiving my expected payments on time every month so far, with the exception of one time when it was 4 days past the first (during the government shutdown – not sure if this was cause of S.S). If anyone has any experience with the program, good or bad, I would be very interested in hearing about it. Just to sum it up, CEPS is a legitimate program available for S.S. recipients, but it is no entitlement program like welfare or Section 8. Always do your due diligence when selecting your tenants regardless of what programs they are on.