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One sees this happening most frequently when Medicaid is involved in providing financial funds for care of a person without assets to pay for their own care.

In the case of a person with financial assets it is up to that person, of POA (if one is acting) to arrange how payment should be made. It can come out of an account automatically if one signs up for this service, and certainly is the easiest way.
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I allowed Moms NH to become payee. I was sure I would not be transferring her. One less job for me. They set up a Personal Needs account for the $50 a month our State allows to come out of her SS.
My thinking...if there was a problem with the last SS check they receive after her passing, they could fight with SS not me.

SS has a problem with clawing back payment before they need to. So then it becomes a fight. The payment that you receive in May is Aprils SS. So if you pass in April, you will not receive the Mays check. If you pass close to the end of April the May check maybe received. You can't use it, SS will want it back. Then there are times SS will claw back a check that is rightfully that persons. That will need to be given back.
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If ur a spouse, this works very differently. As a spouse you need to see an elder lawyer to have ur assets split. The spouse who needs care will spenddown their split and 2 or 3 months before the money is gone, apply for Medicaid. Once Medicaid is OKd their spouse becomes a Community Spouse. They remain in the home, have a car and get enough of the monthly income (social security and pension) to live on. I am giving the basics, an elder lawyer can give u more info.
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Social security will be deposited as it normally is and will not be sent directly to the nursing home. Whoever has POA for the person or who is their rep payee for social security will be responsible for paying the nursing home from the social security and from any other income and assets the person has. In some cases, the nursing home is made the rep payee for the person's social security; they or their POA has to consent to this or they have to be declared incompetent of handling their finances. If the nursing home is the rep payee the social security would go directly to them. Some people have said this is not a good idea because if the person changes nursing homes it's a pain to have to change rep payees. I think having the nursing home as rep payee may be more common in situations where the person is not competent to handle their own finances and when they have no one legally able to handle their bills.

If the person is on Medicaid, their "share of cost" will likewise be paid from their income, including social security. Medicaid allows the person to keep an amount each month for a "personal needs allowance." The amount varies from state to state since state Medicaid programs vary, from $40 on the low end on up to $70-100 on the high end. https://gotltci.com/2023/01/what-your-state-lets-you-keep/
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My MIL is in LTC in a facility in MN, on Medicaid. SS deposits the funds into her account. The facility does an auto withdrawal every month to pay for her care. Medicaid funds go directly to the NH to cover the rest. It may differ by state, but I'm not sure. Medicaid leaves some of her SS benefit every month ($90 or it might have gone up to $120), so she's not "penniless".
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Your question is the reason that 2 people cannot always depend on living off of one person's Social Security. You need to plan just as if the person actually dies and the checks stop. The answer is yes, when someone enters a nursing home, the checks go with the person. In cases with spouses, the other spouse will get to keep some assets but expect that to be reduced
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MJ1929 May 2023
Not true.

If the person is self-paying for that nursing home, their SS check doesn't enter into it.

My mother's SS never was involved with her time in nursing homes.
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If you mean "paid directly," as do the funds from the monthly Social Security payment automatically get paid directly to the nursing home (NH); NOT unless you have given them direct authority to "manage the funds, to be the payee". This requires various documents to be executed well in advance of the NH placement, such as a durable financial and medical Power of Attorney (POA) allowing you to give that authority to the NH.

If you mean, do the funds from the monthly Social Security payment HAVE to be paid to the NH, the answer is generally YES. The LO is allowed to keep ONLY a little of the monthly Social Security payment and any other incoming funds (such as any pension or other retirement funds). And each month, the total asset balance MUST be kept below your State's maximum.

For my mom (we live in an urban east coast area) she can ONLY keep $93 of what she receives from Social Security and from my deceased father's monthly pension payment. All in all, about $3K goes to the NH each month and I still have to file taxes for her (had to pay a bit of Federal taxes last year) because the total she receives is enough to trigger taxes to be paid albeit not that much ($50).

Given there is little my mom needs at this point (she has dementia and is basically bedridden), I often have to "write a check" to the NH just to keep her under the max allowed in total assets that our State set (about $2K). So my mom, actually has a credit balance at the NH as I have to do something with the funds to keep her under the threshold allowed. In theory, she could use those funds to go to the "beauty salon" at her nursing home to have her hair done, but that is not a realistic activity/option for her. I use her funds to buy a few things (candy she likes and maybe a few personal items -- nice hand lotion). She does not need much in the way of clothing (frankly the NH prefers hospital type gowns especially for night as it is easier for staff to get on/off if/when there are accidents).

You can give the NH full financial authority and step out of it entirely. I chose to "manage it" all myself, so I have to write a check on her account each month for what is called her Medicaid "Cost of Care Contribution" (aka almost all of her monthly funds she receives).
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autrysparks3211: If the patient is self paying, it is up to their POA (agent) to arrange for disposition of said patient's social security checks (assuming there is a hard copy check, per se).
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Usually, the check continues to go in the person's account and someone writes a check to the nursing home to pay the monthly bill. If there's no one to handle the finances, that would be different...talk to elder atty about how to handle that.
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