Ambiguity in Determining Financial Capability of SSI and SSDI Beneficiaries With Psychiatric Disabilities

Abstract

Objective Social Security beneficiaries’ liberty is constrained if they are judged incapable of managing their disability payments and are assigned a fiduciary to manage benefit payments on their behalf. Conversely, beneficiaries’ well-being may be compromised if they misspend money that they need to survive. Several studies have shown that determinations of financial capability are made inconsistently and capability guidelines appear to be applied inconsistently in practice. This case series describes the ambiguities remaining for a small number of individuals even after published criteria for capability— failing to meet basic needs and/or harmful spending on drugs— are applied. Methods Trained, experienced assessors rated the financial capability of 119 individuals in intensive outpatient or inpatient psychiatric facilities who received SSI or SSDI payments. Ten individuals’ cases were determined difficult to judge. Results Six sources of ambiguity were identified by case review: distinguishing incapability from the challenges of navigating poverty, the amount of nonessential spending needed to be considered incapable, the amount of spending on harmful things needed to be considered incapable, how intermittent periods of capability and incapability should be considered, the relative weighting of past behavior and future plans to change, and discrepancies between different sources of information. Conclusion The cases raise fundamental questions about what financial incapability is, but also illustrate how detailed consideration of beneficiaries’ living situations and decision making can inform the difficult dichotomous decision about capability.

Financial Capability: Clinicians' Assessment of Beneficiaries With Dual Diagnoses

“…Beneficiaries and clinicians enrolled in a study to develop and validate a new clinician-rated instrument to determine beneficiaries' capability to manage SSA payments (Black et al, 2014;Claycomb et al, 2013;Lazar et al, 2015;Lazar et al, 2016;Serowik et al, 2013). This study was approved and monitored by the Yale University Institutional Review Board and was conducted in accordance with relevant ethical standards (American Psychological Association, 2017).…”

“…Our group has described other reasons that the process of financial capability determinations may involve inconsistencies, even when determinations are based on all available data about the beneficiary (Lazar, Black, McMahon, O'Shea, & Rosen, 2015). The SSA Form 787 instructions require a dichotomous decision about a construct, financial capability, which likely exists on a continuum.…”

Differences in financial inclusion by disability type

“…Adults with work disabilities are less likely than adults with mental disabilities to hold risky financial assets which can result in lower financial well-being due to the inability to build household wealth (Xiao and O'Neill, 2022). People with psychiatric disorders were found to be financially incapable and mismanaged their money (Lazar et al, 2015(Lazar et al, , 2016. Also, people with disabilities from severe multiple sclerosis earn much lower earnings than those with mild multiple sclerosis (Kavaliunas et al, 2015).…”

Disability Type, Financial Capability, and Risky Asset Holding

“…Research using samples of adults with specific types of disabilities shows those in the studies are financially fragile compared to other adults. Lazar et al (2015Lazar et al ( , 2016 tested a tool to rate the financial capability of 118 persons who received SSDI payments, had recently been treated in acute care facilities for psychiatric disorders, and who did not have representative payees or conservators. Almost half (48%) of the participants were found to be financially incapable for a variety of reasons (e.g., harmful spending on illicit drugs).…”