Is there anything that prohibits a beneficiary of SSA/SSI benefits from having another account with the bank for which he is the sole transactor? He has one account that is managed by a representative payee. The second account is currently overdrawn and appears to have been set up for the purpose of receiving insurance claim benefits. Management is attempting to collect the money, but has been unable to contact the customer. The rep payee seems willing to discuss the matter with us, but we have declined since she has no authority to manage anything other than the federal benefits.

I have not heard of any regulation/statute that would prohibit an SSA/SSI beneficiary from having another account under their own name. And you are correct, the representative payee can only be concerned with that specific account for which she/he is rep payee.

And before anyone reading this discussion thinks about using offset or setoff, the accounts are not commonly owned, so it's not an option.

Is the right of offset prohibited because federal benefits cannot be used to satisfy another debt?

No. Because the Rep Payee account is not owned by the beneficiary and the other account is. IMO, you'd need a court order to take funds from the Rep Payee account to pay the overdraft in the other account, or a cooperative rep payee.

The funds in the rep payee account may be the beneficiary's funds, but he doesn't own the account and can't withdraw from it.