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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2016. Informing Social Security's Process for Financial Capability Determination. Washington, DC: The National Academies Press. doi: 10.17226/21922.
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INFORMING SOCIAL SECURITY’S PROCESS FOR

Financial Capability
Determination

Committee to Evaluate the Social Security Administration’s
Capability Determination Process for Adult Beneficiaries

Paul S. Appelbaum, Carol Mason Spicer, Frank R. Valliere, Editors

Board on the Health of Select Populations

Institute of Medicine

Images

THE NATIONAL ACADEMIES PRESS

Washington, DC

www.nap.edu

Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2016. Informing Social Security's Process for Financial Capability Determination. Washington, DC: The National Academies Press. doi: 10.17226/21922.
×

THE NATIONAL ACADEMIES PRESS 500 Fifth Street, NW Washington, DC 20001

This activity was supported by Contract No. SS00-13-60048-0005 with the U.S. Social Security Administration. Any opinions, findings, conclusions, or recommendations expressed in this publication do not necessarily reflect the views of any organization or agency that provided support for the project.

International Standard Book Number-13: 978-0-309-39257-0
International Standard Book Number-10: 0-309-39257-8
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Suggested citation: National Academies of Sciences, Engineering, and Medicine. 2016. Informing Social Security’s process for financial capability determination. Washington, DC: The National Academies Press. doi: 10.17226/21922.

Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2016. Informing Social Security's Process for Financial Capability Determination. Washington, DC: The National Academies Press. doi: 10.17226/21922.
×

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The National Academy of Sciences was established in 1863 by an Act of Congress, signed by President Lincoln, as a private, nongovernmental institution to advise the nation on issues related to science and technology. Members are elected by their peers for outstanding contributions to research. Dr. Ralph J. Cicerone is president.

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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2016. Informing Social Security's Process for Financial Capability Determination. Washington, DC: The National Academies Press. doi: 10.17226/21922.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2016. Informing Social Security's Process for Financial Capability Determination. Washington, DC: The National Academies Press. doi: 10.17226/21922.
×

COMMITTEE TO EVALUATE THE SOCIAL SECURITY ADMINISTRATION’S CAPABILITY DETERMINATION PROCESS FOR ADULT BENEFICIARIES

PAUL S. APPELBAUM (Chair), Elizabeth Dollard Professor of Psychiatry, Medicine and Law, and Director, Division of Law, Ethics and Psychiatry, Department of Psychiatry, Columbia University

KAREN E. ANDERSON, Director, Huntington Disease Care, Education and Research Center, and Associate Professor of Psychiatry and Neurology, Georgetown University Medical Center and MedStar Georgetown University Hospital

MARÍA P. ARANDA, Associate Professor, University of Southern California School of Social Work

NANCY BAGATELL, Associate Professor, Division of Occupational Science and Occupational Therapy, University of North Carolina at Chapel Hill

JULIE BIRKENMAIER, Professor, Saint Louis University School of Social Work

NANCY N. DUBLER, Professor Emerita, Albert Einstein College of Medicine; Consultant for Ethics, New York City Health and Hospital Corporation; and Adjunct Professor, Division of Medical Ethics, New York University Langone Medical Center

LAURA B. DUNN, Director, Geriatric Psychiatry Fellowship Training Program and Professor, Department of Psychiatry and Behavioral Sciences, Stanford University

ALAN M. JETTE, Professor of Health Policy & Management, Boston University School of Public Health

DAVID A. LOEWENSTEIN, Director and Professor of Neuropsychology, Department of Psychiatry and Behavioral Sciences, University of Miami Miller School of Medicine

MARC A. NORMAN, Professor, Medical Neuropsychology, and Director, Neuropsychiatry/Epilepsy Clinical Evaluation Program, University of California, San Diego

ELDAR SHAFIR, William Stewart Tod Professor of Psychology and Public Affairs, Department of Psychology and the Woodrow Wilson School of Public and International Affairs, Princeton University

KELLY A. THOMPSON, Thompson Wildhack PLC, Arlington, Virginia

Consultant

ALLEN W. HEINEMANN, Director, Center for Rehabilitation Outcomes Research, Rehabilitation Institute of Chicago

Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2016. Informing Social Security's Process for Financial Capability Determination. Washington, DC: The National Academies Press. doi: 10.17226/21922.
×

IOM Fellow

KENDALL M. CAMPBELL, Co-Director, Center for Underrepresented Minorities in Academic Medicine, and Associate Professor, Family Medicine and Rural Health, Florida State University College of Medicine

IOM Project Staff

CAROL MASON SPICER, Study Director

FRANK R. VALLIERE, Associate Program Officer

JENNIFER FLAUBERT, Associate Program Officer (since December 2015)

NICOLE GORMLEY, Senior Program Assistant

PAMELA RAMEY-McCRAY, Administrative Assistant

FREDERICK ERDTMANN, Director, Board on the Health of Select Populations

Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2016. Informing Social Security's Process for Financial Capability Determination. Washington, DC: The National Academies Press. doi: 10.17226/21922.
×

Reviewers

This report has been reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process. We wish to thank the following individuals for their review of this report:

Henry Aaron, The Brookings Institution

Sara S. Bachman, Boston University School of Social Work

Denise Burnette, Columbia University School of Social Work

Lisa Dixon, Columbia University Medical Center

Kathryn Edin, Johns Hopkins University

Eric B. Elbogen, University of North Carolina at Chapel Hill School of Medicine

Jason Karlawish, University of Pennsylvania

Kristi L. Kirschner, University of Illinois at Chicago

Daniel C. Marson, The University of Alabama at Birmingham

Barton W. Palmer, University of California, San Diego

Elizabeth K. Rasch, National Institutes of Health

Marc I. Rosen, Yale University School of Medicine

Elyn Saks, University of Southern California Gould School of Law

Page viii Cite
Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2016. Informing Social Security's Process for Financial Capability Determination. Washington, DC: The National Academies Press. doi: 10.17226/21922.
×

Although the reviewers listed above provided many constructive comments and suggestions, they were not asked to endorse the report’s conclusions or recommendations, nor did they see the final draft of the report before its release. The review of this report was overseen by Georges Benjamin, American Public Health Association, and Bradford H. Gray, The Urban Institute. They were responsible for making certain that an independent examination of this report was carried out in accordance with institutional procedures and that all review comments were carefully considered. Responsibility for the final content of this report rests entirely with the authoring committee and the institution.

Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2016. Informing Social Security's Process for Financial Capability Determination. Washington, DC: The National Academies Press. doi: 10.17226/21922.
×

Preface

The U.S. Social Security Administration (SSA) provides benefits to disabled adults and children, offering vital financial support to more than 17 million disabled Americans. Of that group, approximately 5 million have been deemed—by virtue of youth or mental or physical impairment—incapable of managing or directing the management of their benefits.1 Hence, a representative payee has been appointed to receive and disburse SSA payments for these beneficiaries to ensure that their basic needs for shelter, food, and clothing are met. Periodically, however, concerns have been expressed about the accuracy of the process by which SSA determines whether beneficiaries are capable of managing their benefits, with some evidence suggesting that underdetection of incapable recipients may be a particular problem.

The importance of creating as accurate a process as possible for incapability determinations is underscored by the consequences of incorrectly identifying recipients either as incapable when they can manage their benefits or as capable when they cannot. Given the importance of individual autonomy in decision making in a democratic society, deprivation of the right to manage one’s money—which ensues from a finding of incapability—represents a serious infringement on liberty that should occur only when absolutely necessary. Conversely, failure to identify beneficiaries who are incapable of managing their funds means abandoning a vulnerable population to potential homelessness, hunger, and disease. Needless to say, neither error is desirable.

___________________

1 The prepublication version of this report erroneously included a group of nondisabled beneficiaries in the numbers provided in the preceding sentences. These numbers were revised for accuracy.

Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2016. Informing Social Security's Process for Financial Capability Determination. Washington, DC: The National Academies Press. doi: 10.17226/21922.
×

With support from SSA, the Institute of Medicine (IOM) of the National Academies of Sciences, Engineering, and Medicine convened a committee to evaluate SSA’s capability determination process. In pursuit of that goal, the committee reviewed the relevant professional literatures in several languages, heard testimony from researchers who study the capability determination process and from persons directly involved with it, considered existing assessment tools and their applicability to this process, looked at comparable programs in the public and private sectors in Canada and the United States, and obtained background information and data from SSA on the operation of its system.

Drawing on all of these sources, the committee formulated a number of conclusions and recommendations that it believes can inform and guide efforts to improve the current capability determination process. Most notably, the committee concluded that basing capability determinations on evidence of beneficiaries’ actual performance in meeting their basic needs is superior to office-based assessment of individuals’ financial competence. In such a performance-based process, priority is given to information from persons who are in direct contact with beneficiaries and are in a position to know about their financial performance.

On behalf of the committee, I want to thank all of the individuals who shared their time and expertise during the committee’s information-gathering sessions. Special thanks go to Winthrop Cashdollar at America’s Health Insurance Plans for collecting and compiling information from a number of private companies that provide disability income protection coverage about their procedures for determining when a claimant is not competent to handle disability income benefits. I also extend thanks to the IOM staff members who played a key role in the production of this report, including Rick Erdtmann (board director), Carol Mason Spicer (study director), Frank Valliere (associate program officer), Nicole Gormley (senior program assistant), and Julie Wiltshire (financial associate). Research assistance was provided by Daniel Bearss and Rebecca Morgan. Rona Briere and Alisa Decatur are to be credited for the superb editorial assistance they provided in preparing the final report.

Finally, as committee chair, I want to express my appreciation for the hard work and collegial approaches of all the committee members. I know they share my hope that this report can have a positive impact on the lives of persons with disabilities who may need assistance in managing their benefits.

Paul S. Appelbaum, Chair
Committee to Evaluate the Social Security
Administration’s Capability Determination
Process for Adult Beneficiaries

Page xiii Cite
Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2016. Informing Social Security's Process for Financial Capability Determination. Washington, DC: The National Academies Press. doi: 10.17226/21922.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2016. Informing Social Security's Process for Financial Capability Determination. Washington, DC: The National Academies Press. doi: 10.17226/21922.
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Acronyms and Abbreviations

ACED Assessment of Capacity for Everyday Decision-making
ADA Americans with Disabilities Act
AHIP America’s Health Insurance Plans
ASD autism spectrum disorder
ATM automated teller machine

CAFI

Clinician Assessment of Financial Incapability

CDR continuing disability review
CPP Canada Pension Plan
CSRS Civil Service Retirement System

DDS

Disability Determination Services

DE disability examiner
DEBT Disability Examiner Basic Training Program
DI Disability Insurance
DSM-IV Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition

EFB

Everyday Functioning Battery

ESDC Employment and Social Development Canada

FCAI

Financial Competence Assessment Instrument

FCI Financial Capacity Instrument
FCI-SF Financial Capacity Instrument-Short Form
FEGLI Federal Employees’ Group Life Insurance
Page xviii Cite
Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2016. Informing Social Security's Process for Financial Capability Determination. Washington, DC: The National Academies Press. doi: 10.17226/21922.
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FEHB Federal Employee Health Benefits
FERS Federal Employee Retirement System
FISCAL Financial Incapability Structured Clinical Assessment done Longitudinally

HRSA

Health Resources and Services Administration

IADL

instrumental activity of daily living

ICD International Classification of Diseases
ICF International Classification of Functioning, Disability and Health
ILS Independent Living Scales
ILSS Independent Living Skills Survey
IOM Institute of Medicine

KELS

Kohlman Evaluation of Living Skills

MMM

Money Mismanagement Measure

NADE

National Association of Disability Examiners

NCE National Counselor Examination
NICS National Instant Criminal Background Check System
NPV negative predictive value

OAS

Old Age Security

OASDI Old-Age, Survivors, and Disability Insurance
OASI Old-Age and Survivors Insurance
OIDAP Occupational Information Development Advisory Panel (SSA)
OIG Office of the Inspector General
OIG-SSA Office of the Inspector General for the Social Security Administration
OPM U.S. Office of Personnel Management

POA

power of attorney

POMS Program Operations Manual System
PPV positive predictive value

RVSR

Rating Veterans Service Representative

SES

socioeconomic status

SGA substantial gainful activity
SLOF Specific Levels of Function
SSA U.S. Social Security Administration
Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2016. Informing Social Security's Process for Financial Capability Determination. Washington, DC: The National Academies Press. doi: 10.17226/21922.
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SSDI Social Security Disability Insurance
SSI Supplemental Security Income

THRIFT

Timeline Historical Review of Income and Financial Transactions

VA

U.S. Department of Veterans Affairs

VBA Veterans Benefits Administration
VSCM Veterans Service Center Manager
VSR Veterans Service Representative

WHO

World Health Organization

Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2016. Informing Social Security's Process for Financial Capability Determination. Washington, DC: The National Academies Press. doi: 10.17226/21922.
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The U.S. Social Security Administration (SSA) provides benefits to disabled adults and children, offering vital financial support to more than 19 million disabled Americans. Of that group, approximately 5.5 million have been deemed – by virtue of youth or mental or physical impairment - incapable of managing or directing the management of their benefits. Hence, a representative payee has been appointed to receive and disburse SSA payments for these beneficiaries to ensure that their basic needs for shelter, food, and clothing are met. Periodically, however, concerns have been expressed about the accuracy of the process by which SSA determines whether beneficiaries are capable of managing their benefits, with some evidence suggesting that underdetection of incapable recipients may be a particular problem.

The importance of creating as accurate a process as possible for incapability determinations is underscored by the consequences of incorrectly identifying recipients either as incapable when they can manage their benefits or as capable when they cannot. Failure to identify beneficiaries who are incapable of managing their funds means abandoning a vulnerable population to potential homelessness, hunger, and disease.

Informing Social Security’s Process for Financial Capability Determination considers capability determination processes used by other similar benefit programs, abilities required to manage, and direct the management of, benefits, and effective methods and measures for assessing capability. This report evaluates SSA’s capability determination process for adult beneficiaries and provides recommendations for improving the accuracy and efficiency of the agency’s policy and procedures for making these determinations.

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