(a) Current maintenance. Payments certified to a representative payee on behalf of an annuitant shall be considered as having been applied for the use and benefit of the annuitant when they are used for the annuitant's current maintenance. Current maintenance includes costs incurred in obtaining food, shelter, clothing, medical care, and personal comfort items.

(b) Institutional care. If an annuitant is receiving care in a Federal, state, or private institution because of mental or physical incapacity, current maintenance includes the customary charges made by the institution in providing care and maintenance, as well as expenditures for those items which will aid in the annuitant's recovery or release from the institution or expenses for personal needs which will improve the annuitant's conditions while in the institution.

(c) Support of legal dependents. If the current maintenance needs of the annuitant are met, the representative payee may use part of the payments for the support of the annuitant's legally dependent spouse, child, and/or parent.

(d) Claims of creditors. A representative payee may satisfy debts to creditors out of present benefit payments only if the current and reasonably foreseeable needs of the annuitant are met.

(e) Conservation and investment. After the representative payee has used the annuity payments consistent with the rules in paragraphs (a) through (d) of this section, any remaining annuity shall be conserved or invested on behalf of the annuitant. Any investment must show clearly that the representative payee holds the property in trust for the annuitant.