All-data approach to assessing financial capability in people with psychiatric disabilities

How is Consumer Financial Capability Measured?

The research literature on the growing field of consumer financial capability displays a wide diversity of understanding about the meaning and measurement of the concept. While sufficient research literature has been produced for a review of measurement domains and indicators, this work remains undone. The aim of the study is to assess the quantitative peer-reviewed research literature to advance the field toward building an evidence base for financial capability interventions and policies to improve family financial well-being and reduce economic inequality. This scoping review study analyzed the financial capability scholarly literature between 2015 and 2018. Overall, 34 studies used quantitative data and met all inclusion criteria for this study. Findings suggest that financial capability measurement constructs were operationalized in 12 different ways (n = 22). Most commonly, financial capability was operationalized as the combination of objective financial knowledge and financial access. Few studies included measurement of financial socialization or financial well-being. Most studies measured financial access using only formal financial access measures, such as bank account ownership and/or whether the consumer has investments. A smaller number of studies measured both formal and informal access (including use of non-bank financial institutions/products). Half of the articles that included financial access used bank account either solely or in combination with other measures as the indicator(s). Many studies lacked any measure of financial access. Recommendations are made about standardizing measurement for the constructs within financial capability and measurement of financial capability.

Disability Type, Financial Capability, and Risky Asset Holding

Risky financial asset holding is considered an indicator of financial well-being because risky asset holders are likely to accumulate more wealth than nonholders. Like the general population in the United States, many people with disabilities need long-term financial planning services. The purpose of this study was to examine whether disability type and financial capability are associated with risky asset holding of adults with disabilities. Using data from the 2015 National Financial Capability Study, we found that adults with different types of disabilities have different chances of holding risky assets. After controlling for financial capability, income, and other variables in the logistical model, people who are deaf or have difficulties running errands are more likely, while people with a work disability are less likely, than the mentally disabled to hold risky financial assets. In addition, two financial capability variables, objective financial knowledge, and desirable financial behavior, are positively associated with risky asset holding after controlling for other factors. Several disabilities, financial capability, and other factors showed differences in risky asset holding when lower-income and higher-income subsamples were examined.

Is Capability to Manage Finances Stable Over Time?

Procedures to determine when people receiving disability payments are incapable of managing their money recently have been re-examined by the Social Security Administration. Understanding the time-course of financial capability is necessary because people who are judged capable of managing their funds at one point may go on to need supports in the future, and those judged incapable and assigned a fiduciary will need re-evaluation so they have the most possible autonomy over their funds management. The financial capability of 132 individuals was examined during acute treatment and twenty-four weeks later. The extent to which baseline variables predicted future capability were examined. More participants were assessed as financially incapable at baseline (n=72) than at the twenty-four-week follow-up (n=43). Most participants had stable capability across assessment periods (n=35 remained incapable; n=52 remained capable), however a substantial minority (n=37) moved from incapable to capable. People who transitioned from incapable to capable had greater net reductions in psychiatric distress ratings and days of alcohol use from baseline to follow-up, compared to people who remained incapable. In multivariate analyses, incapability at follow-up was predicted by having been rated incapable at baseline, drug use at baseline, and having a psychotic disorder. The high baseline rate of incapability determinations suggests that admission into intensive psychiatric programs may be a good time to assess an individual's financial capability. However, these findings also suggest the importance of periodically reassessing beneficiaries' capability because high proportions rated incapable were rated to be capable twenty-four weeks later.

Financial Capability: Clinicians' Assessment of Beneficiaries With Dual Diagnoses

OBJECTIVE

Adults with mental health disorders whose ability to work is sufficiently impeded are entitled to financial supports from the Social Security Administration. Beneficiaries determined to be incapable of managing these funds are supposed to be assigned a representative payee to assist beneficiaries in meeting their needs. However, patterns of payee assignment suggest that payee assignment is impacted by factors other than those the Social Security Administration instructs clinicians to consider. In this study, we tested the association between clinicians' judgments of their clients' financial capability and hypothesized predictors (demographic characteristics, psychiatric diagnosis, recent alcohol and other substance use, self-rated money mismanagement, recent homelessness, and provider characteristics). We posited that predictors might act indirectly on capability judgment via their impact on beneficiaries' money management.

METHODS

Altogether, 261 people receiving intensive mental health care who did not have payees or fiduciaries were enrolled after providing written informed consent. These beneficiaries completed in-person assessment interviews, reporting demographic characteristics, treatment history, substance use, and homelessness. Mental health clinicians identified by the beneficiaries were enrolled in the study and asked to judge their clients' financial capability with standard Social Security instructions for determining capability. Bivariate associations between hypothesized predictors and clinicians' determinations of incapability were tested. In multivariate probit regression models, incapability determination was modeled as a function of all beneficiary and clinician characteristics that had significant bivariate associations with the outcome.

RESULTS

Providers identified 24% of their clients as financially incapable. Determinations of financial incapability were unrelated to any beneficiary or provider demographic characteristics but were positively associated with money mismanagement, homelessness, and having a psychotic disorder. Alcohol use and other substance use were only significantly associated with capability determinations indirectly through their effects on money mismanagement.

CONCLUSIONS

Providers' judgments of beneficiaries' capability to manage their funds were associated with factors that were consistent with Social Security Administration guidelines and were, importantly, not associated with personal characteristics. This finding suggests that guidelines can be fairly applied by clinicians and that reported inconsistencies in payee assignment are accounted for by other factors. The Social Security Administration is currently considering other approaches to standardize capability determinations.

Ambiguity in determining financial capability of SSI and SSDI beneficiaries with psychiatric disabilities

OBJECTIVE

The liberty of individuals who receive Social Security disability payments is constrained if they are judged incapable of managing their payments and are assigned a payee or conservator 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 that capability guidelines appear to be applied inconsistently. This article describes ambiguities that remained for individuals even after a comprehensive assessment of financial capability was conducted by independent assessors.

METHODS

Trained, experienced assessors rated the financial capability of 118 individuals in intensive outpatient or inpatient psychiatric facilities who received Social Security Disability Insurance or Supplemental Security Income.

RESULTS

Ten individuals' cases were determined to be difficult to judge. Six sources of ambiguity were identified by case review: distinguishing incapability from the challenges of navigating poverty, the amount of nonessential spending that indicates incapability, the amount of spending on harmful things that indicates incapability, how to consider intermittent periods of capability and incapability, the relative weighting of past behavior and future plans to change, and discrepancies between different sources of information.

CONCLUSIONS

The cases raise fundamental questions about how to define and identify financial incapability, but they also illustrate how detailed consideration of beneficiaries' living situations and decision making can inform the difficult dichotomous decision about capability.