6

Conclusions and Recommendations

The committee’s conclusions and recommendations fall within the areas of (1) evidence for determining financial capability, (2) systematic identification of adult U.S. Social Security Administration (SSA) beneficiaries at risk for financial incapability, (3) responding to changes in capability over time, and (4) innovation and evaluation.

EVIDENCE FOR DETERMINING FINANCIAL CAPABILITY

The committee formulated the following conclusions and recommendation pertaining to determinations of financial capability for adult SSA beneficiaries.

• Because of the variations in symptoms over time, the variable impact of disorders on the individuals affected, and the lack of correlation in many cases between the severity of one’s clinical symptoms and one’s functional limitations, the number of conditions for which incapability may be determined solely on the presence and severity of the condition itself is very limited. Examples include severe intellectual disability; significant autism; or advanced Alzheimer’s disease, frontotemporal dementia, or dementia with Lewy bodies.
• The committee distinguishes between financial competence (i.e., the financial knowledge and judgment one possesses) and financial performance (i.e., the degree of success in handling financial demands in the real world). Evidence of beneficiaries’ real-world financial

Financial Performance

• Successful financial performance reflects, at a minimum, sufficient financial competence to implement financial decisions in the real world, that is, the presence of sufficient cognitive, perceptual, affective, communicative, and interpersonal abilities to manage or direct others to manage one’s benefits.
• Supports and stressors in individuals’ environments can enhance or diminish their (real-world) financial performance. Thus, one may be financially competent (i.e., possess and demonstrate financial knowledge and judgment) in an office or clinical setting but may not exercise one’s financial knowledge, skills, and judgment in a real-life setting sufficiently to meet one’s basic needs (food, shelter, clothing). Conversely, an individual may fail to demonstrate financial knowledge or judgment in a clinical setting but perform capably with the assistance of support systems in his or her environment.
• SSA’s requirement for “lay” (i.e., nonmedical and nonlegal) evidence of beneficiaries’ financial performance in making capability determinations is consistent with the committee’s conclusion that evidence of real-world financial performance is the most reliable basis for making such determinations. Field officers are one source of lay evidence, particularly if they have had direct contact with beneficiaries. Other sources include professionals and laypeople who can provide nonmedical information relevant to beneficiaries’ ability to manage or direct the management of their funds. However, the reliability of third-party informants varies. Some informants lack the opportunity to observe financial performance, while others spend insufficient time with the individual to assess his or her performance accurately. Some informants may have impaired judgment themselves, or may have an incentive to under- or overestimate the individual’s financial abilities.
• Because many informants, including medical and nonmedical professionals, are not trained specifically in the assessment of financial performance, they would benefit from detailed direction as to the type of performance information that is helpful to SSA in making a determination of financial capability.
• SSA currently provides little formal guidance to medical professionals and no formal guidance to other informants on the type of

• information on which an opinion regarding capability should be based or the type of information that would be helpful to SSA.

• In principle, assessment instruments could be helpful to medical and other professionals in gathering evidence of beneficiaries’ financial performance. However, many of the instruments identified by the committee are designed to assess financial competence in an office or clinical setting. Some of the instruments appear to measure financial performance in a real-world setting, but most of them rely primarily on self-reported behavior. This is a limitation in that information about financial performance provided by the individual being assessed may reflect that person’s lack of awareness of his or her impairment or deliberate efforts to conceal it. While some of these instruments show good psychometric properties in relation to other assessment methods, sufficient data on reliability and validity across populations are not yet available to warrant recommending their routine use.
• Although SSA provides field officers with a list of topic areas and questions to guide the in-person interviews with beneficiaries, many beneficiaries assessed for capability are not seen in person in a field office.
• Providing detailed guidance to all informants about the information on financial performance that SSA would find helpful in rendering a capability determination would likely improve the strength, quality, and consistency of the evidence it receives.

Financial Competence

• At times, no or very limited information about a beneficiary’s financial performance will be available—for example, when the person has had no funds to manage or when no third-party informant with knowledge of the person’s performance can be identified. When evidence of financial performance is unavailable, capability determinations may need to be based on evidence of financial competence. Evidence of beneficiaries’ degree of financial competence also can help inform interpretations of the evidence regarding beneficiaries’ financial performance.
• As with financial performance, detailed guidance and sample questions aimed at the assessment of financial competence would assist informants in providing relevant information about beneficiaries’ financial knowledge and judgment, and would be likely to improve the strength, quality, and consistency of the evidence provided to SSA.
• As with instruments aimed at assessing financial performance, sufficient data on the reliability and validity across populations of

With respect to financial performance, SSA guidance to all medical and nonmedical informants could be based on the questions SSA currently provides to field officers (see Box 2-2 in Chapter 2). Additional questions, such as those included in the Financial Incapability Structured Clinical Assessment done Longitudinally (FISCAL), a financial performance assessment interview, may be helpful as well. Guidance pertaining to financial competence could include questions such as those developed by the Canada Pension Plan (see Box 5-1 in Chapter 5), along with requests that the basis for informants’ answers be specified. Should sufficient data become available in the future on the reliability and validity of structured assessments of financial performance or competence, SSA guidance could be updated to indicate the value of such approaches. Asking informants to provide information based on a common set of questions in areas relevant to beneficiaries’ financial performance and competence would help improve and standardize the information received by the field offices.

To enable SSA to judge the validity of information from informants, it is important that evidence provided for capability determinations specify how well and for how long the informant has known the individual and the nature of their relationship.¹ It is also important to specify the extent to which (1) the informant’s judgment is based on observed behavior;² (2) the informant’s judgment is based on the individual’s self-report; (3) the informant’s judgment is based on information from collateral informants, and the perceived quality of these informants; and (4) in the case of professionals,

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¹ This would include, to the extent possible, the beneficiary’s perspective on the relationship as well as the informant’s.

² The U.S. Office of Personnel Management (OPM) asks informants to provide information about their “relationship to, and amount of contact with, the individual during the relevant time period” and “what actions or incidents were personally observed which would show whether the individual’s condition interfered with the ability to handle personal affairs, and how often these were observed” (see Appendix C, OPM, Form RI 30-3, Information Necessary for Competency Determination).

the judgment is based on the individual’s medical record and the assessments of other health care professionals (including other physicians, psychologists, social workers, and nurses). Such specification of the basis for the evidence provided will allow for greater understanding of the quality of the evidence as support for a judgment regarding financial capability.

It is important to note that personal and environmental factors may change or fluctuate, thereby affecting an individual’s financial performance. For this reason, it is necessary not only to assess financial performance at a single point in time but also to assess it longitudinally to best estimate a person’s financial capability. In addition, interpretations of evidence regarding beneficiaries’ financial performance can be informed by evidence of beneficiaries’ degree of financial competence.

SYSTEMATIC IDENTIFICATION OF ADULT SSA BENEFICIARIES AT RISK FOR FINANCIAL INCAPABILITY

Risk Criteria

The following conclusions and recommendations address systematic identification of individuals who are at risk for financial incapability.

• The primary goal of representative payment is to ensure that beneficiaries’ basic needs—housing, food, and clothing—are being met. Research suggests beneficiaries with representative payees experience substantive benefits relative to their basic needs and improved substance abuse outcomes. For this reason, it is important that SSA identify potentially incapable beneficiaries to evaluate and make a determination regarding their capability.
• Multiple reviews by the SSA Office of the Inspector General (SSA-OIG) have suggested that SSA’s current process for determining capability may be identifying too few beneficiaries who would benefit from a representative payee. Anecdotal evidence presented to the committee in open session suggests that SSA’s capability determinations are more likely to miss beneficiaries who need a representative payee than to require a representative payee unnecessarily.
• Except for a limited number of conditions (e.g., coma lasting at least 30 days; verbal, performance, or full-scale intelligence quotient [IQ] of 59 or less), SSA currently has no standardized process for identifying individuals who may be in need of a capability evaluation.
• Reliance on diagnostic criteria alone to identify beneficiaries who need a representative payee is inadequate for a number of reasons,

• including the likelihood of identifying too many people for capability evaluation in some diagnostic categories and missing people in other categories.

• Identification and development of easy-to-apply, efficient approaches, including screening criteria, that could be incorporated into the disability application process to identify people at high risk for incapability would be valuable in helping to ensure that potentially incapable beneficiaries receive further evaluation. Such approaches or criteria also could help identify recipients of old-age and retirement benefits who are at risk for financial incapability.

SSA has the opportunity, whether through the development of formal screening criteria or other approaches (e.g., identifying risk markers to inform the judgment of field officers), to improve its ability to identify beneficiaries who may lack financial capability. The committee envisions the development of a model based on existing data, such as age, gender, impairment code, and education level, to identify predictors of incapability. The resulting model could be refined and its reliability and validity improved through pilot projects involving samples of beneficiaries who would undergo more detailed assessments of capability. Prior to large-scale implementation, the success of the resulting approach in identifying incapable beneficiaries who would otherwise not have been found could be tested.

Dual Beneficiaries

• A 2012 SSA-OIG report indicated that more than 6,000 individuals who were receiving benefits from both the Supplemental Security Income and Social Security Disability Insurance programs had been assigned a representative payee in one program but not the other.
• SSA beneficiaries also may receive benefits from another federal agency, such as the U.S. Department of Veterans Affairs (VA) or OPM, each of which has its own policies and procedures for determining whether beneficiaries are capable of managing their benefits.
• While acknowledging the potential technological, legal, and procedural challenges to data sharing, the committee concludes that sharing information about incapability determinations within SSA and among relevant federal agencies could increase the likelihood

OPM, for example, uses computerized matching to identify beneficiaries who receive other federal benefits. Although such matching is used primarily to analyze whether benefits from other programs may affect OPM benefits, a process of this sort can also provide information that indicates whether other programs have identified the beneficiary as having impaired capability.

RESPONDING TO CHANGES IN CAPABILITY OVER TIME

The following conclusions and recommendation address the need for periodic reassessment of beneficiaries’ financial capability over time.

• Many psychiatric and cognitive conditions are characterized by progression or fluctuation over time in the presence, severity, and nature of symptoms. Such changes suggest the value of a process for periodic reassessment of a beneficiary’s capability.
• SSA’s lack of a formal process for periodically reviewing a beneficiary’s capability is a significant weakness. Some mechanism for periodic reassessment is needed to ensure that beneficiaries with fluctuating, deteriorating, or improving financial capability are classified accurately.

For disability beneficiaries, SSA procedures call for periodic continuing disability reviews (CDRs). Although CDRs provide an opportunity for capability (re)assessments, their purpose is to identify any changes

(improvements) in the medical basis for beneficiaries’ disability award. Thus, even if the CDRs were to occur on schedule, they would not fully serve the purpose of reassessment of financial capability.³ SSA could apply the same principle used in the CDR process to develop an analogous process for recognizing and responding to changes in capability over time. Reassessments initially could be targeted toward (1) beneficiaries who had been determined to be incapable but who might improve over time as their conditions or environmental supports changed; and (2) beneficiaries who, although capable, were at risk for becoming incapable as their condition progressed or their environment changed. As screening criteria or other systematic methods for identifying people at high risk for financial incapability were developed, they might be used to broaden the target population for periodic reassessment.

In addition, beneficiaries, family members, representative payees, and professionals who were likely to come into contact with beneficiaries could be alerted systematically to notify SSA if they believed that beneficiaries’ capability had changed so as to warrant redetermination. SSA might also implement a process to survey payees and/or beneficiaries periodically, similar to that of OPM, integrating screening questions that could trigger the need to further investigate the beneficiary’s financial capability.

INNOVATION AND EVALUATION

Supervised Direct Payment

• The decision to appoint a representative payee affects the beneficiary’s autonomy, and hence should occur only when clearly necessary to ensure that the beneficiary’s basic needs will be met.
• When information available about a beneficiary’s financial performance is insufficient to determine the need to appoint a representative payee, the use of a supervised direct payment option may be helpful. Under such a model, benefits are paid directly to the beneficiary, but an individual is designated to supervise the beneficiary’s expenditures. Reassessment after a trial period during which the beneficiary’s use of benefits is observed and assessed permits more accurate determination of the beneficiary’s capability in indeterminate or borderline cases.

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³ For example, there are beneficiaries whose condition precludes their ability for substantial gainful activity but does not (yet) affect their financial competence or performance. When such a condition invariably will worsen, a CDR is required only every 5 to 7 years because the individual is not expected to regain the ability to work. As some of the conditions worsen, however, they may affect the individual’s financial capability. Such cases are among those that are important for SSA to reevaluate.

• Supervised direct payment may have other advantages. By adopting a supported decision-making model, supervisors can provide guidance and instruction to beneficiaries on managing their benefits and help respond to the challenges posed by the fluctuations in some beneficiaries’ financial competence and performance. Supported decision making encourages beneficiaries’ expression of preferences, beliefs, and values; allows collaboration in decision making; and provides opportunities for beneficiaries to make independent decisions whenever possible. Appropriate use of this approach may provide a beneficiary with greater control over his or her life than would be the case for someone without such support.
• Supervised direct payment may enable some beneficiaries who might otherwise require the appointment of a representative payee to manage or direct the management of their benefits to meet their basic needs, thus maximizing their decisional autonomy.

“Qualified beneficiaries” refers to two groups of individuals. The first is beneficiaries who may be incapable of managing or directing the management of their benefits but for whom there is insufficient information regarding financial performance to render a determination. The second is beneficiaries who are determined by SSA to be incapable, but who either display financial performance in some but not all areas of managing their benefits or successfully manage their benefits some but not all of the time. The VA’s supervised direct payment option for individuals who are determined to be incompetent but able to manage benefits with supervision provides a model for such an approach. Instead of the VA’s appointing a fiduciary for such individuals, they receive their benefits directly but under the supervision of a Veterans Service Center Manager. This approach could provide a model for a demonstration project by SSA.

Program Evaluation

• For the benefit programs examined by the committee, including SSA’s, empirical data are lacking on the reliability and validity of capability/competency determinations, precluding assessment of the accuracy and efficiency of their determination processes.
• The committee has made a number of recommendations that could increase the accuracy of identification of beneficiaries in need of representative payees. Without baseline data and ongoing data

The measurement and evaluation process envisioned in the present report would need to be designed and carried out by trained experts (whether in house or external) with detailed knowledge of SSA work flow and procedures. Such a process could comprise a variety of steps, including assessments of the interrater reliability of the capability determination process, in-depth assessments of selected beneficiaries to determine the accuracy of earlier determinations, and evaluations of the impact of the recommendations in this report (e.g., guidance on the evidence to be provided for capability determinations). A robust measurement and evaluation process would provide substantial and much-needed insight into what SSA is currently doing well and what it may, at reasonable cost, be able to do significantly better.