Informing Social Security's Process for Financial Capability Determination (2016) / Chapter Skim
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5 Methods and Measures for Assessing Financial Competence and Performance
5 Methods and Measures for Assessing Financial Competence and Performance
Pages 125-152
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From page 125... ...
Assessment of financial capability involves the collection, integration, and interpretation of relevant information from a variety of sources. These sources of information may include • interviews with the individual; • behavioral observations of the individual; • formal financial capability assessment instruments (e.g., structured interviews)
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From page 126... ...
INSTRUMENTS DESIGNED TO ASSESS FINANCIAL CAPABILITY As part of its statement of task, SSA asked the committee to consider the use of assessment tools that could be employed in SSA's capability determination process. Many of the available instruments assess financial competence (financial knowledge and/or financial judgment)
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From page 127... ...
Instruments used to assess financial knowledge and/or financial judgment collect information directly from the person's self-report; indirectly from collateral informants, such as family members or friends; or, increasingly, through direct observation of the ability of the person to perform calculations (Gerstenecker et al., 2015; Marson et al., 2000) , work with actual currency (Marson et al., 2000)
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From page 128... ...
If, as discussed in Chapter 4, financial performance is the most important component of financial capability for the purpose of determining the need for a representative
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From page 129... ...
As discussed later in this chapter, however, not all informants are equally good reporters of financial performance, nor are all health care providers in a position to render accurate judgments about financial capability, given their lack of training in this area and their limited time and opportunities to assess financial capability in the individuals they see. Sensitivity and Specificity To be effective, any instrument used to determine deficits in financial capability needs to identify correctly a high percentage of persons who are truly impaired (sensitivity)
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Overview of Instruments Available for Assessing Financial Capability The committee identified and reviewed eight instruments developed specifically to evaluate aspects of financial capability. Annex Table 5-1 at the end of this chapter summarizes information about each of these instruments, including its psychometric properties.
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CAFI FCAI FCI FISCAL MMM THRIFT Assessment of Financial Performance In contrast to financial knowledge and financial judgment, which can be measured in an office or clinical setting, financial performance represents the actual, real-world performance (or success) of an individual in handling financial demands in the context of the stresses, supports, contextual cues, and resources in his or her actual environment.
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The Financial Capacity Assessment Instrument (FCAI) also can be used to assess financial knowledge.
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Issues commonly of concern in this population include the ability to manage one's finances. Therefore, the authors developed a specific version of the ACED's structured questionnaire to assess financial judgment -- and possibly financial performance.
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In reviewing the literature, the committee found a number of instruments designed to assess functional domains that may include or overlap with financial capability. Although these instruments were not designed specifically to assess financial performance and competence, several of them have validated financial knowledge subscales that can be used to assess such skills as identifying and counting currency, writing a check, and balancing a checkbook.
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From page 135... ...
Because all of the above instruments were designed to assess functional capacity across a broad range of domains, none permits the comprehensive assessment of financial competence and performance enabled by instruments designed specifically for that purpose, despite having validated financial subscales. It should also be noted that, as with the latter instruments, none of these subscales directly taps the ability of individuals to manage their benefits directly, although the ILSS includes an item for informants to rate the degree to which a person contacted someone responsible for financial support and asked that individual relevant questions.
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From page 136... ...
Second, most of the instruments were designed for use with individuals with specific disorders and therefore, without additional validation, cannot be generalized for use with individuals with different disorders or of diverse ethnic and cultural backgrounds. Given the diversity of conditions and paths that may lead to deficits in financial performance, it is reasonable to question whether a test developed for one condition is equally valid for another.
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From page 137... ...
Collateral reports from individuals knowledgeable about the beneficiary's financial performance in meeting his or her basic needs are especially useful when individuals, including those with significant psychiatric or cognitive disorders, cannot accurately provide direct information about their financial capability (e.g., they may provide in accurate self-assessment or be unable to participate in direct assessment)
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From page 138... ...
. Because diagnosis and medical evidence are less important than actual knowledge of a person's financial capabilities, medical professionals, including consultative examiners, who lack current information about the individual's real-world financial performance, who do not know the person well, or who lack access to good collateral informants or relevant records may not provide the most useful information to SSA about the person's financial capability.
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From page 139... ...
In addition, because most informants, including professionals, are not trained specifically in assessment of financial competence and performance, they would benefit from robust direction as to the type of information that is helpful in making a determination of financial capability. Providing such detailed guidance to professional and lay informants could be expected to improve the strength and quality of the evidence they provide.
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From page 140... ...
The FISCAL provides another source of questions that could be used to guide informants in acquiring and providing information about financial performance. Evidence of financial competence may be needed to inform capability determinations when evidence of a beneficiary's real-world financial performance is very limited or unavailable, either because the person has had no funds to manage recently or because no reliable informant with such knowledge can be identified.
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From page 141... ...
affect their financial competence or performance. When such a condition invariably will worsen, a CDR is required only every 5-7 years because the individual is not expected to regain the ability to work.
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In principle, assessment instruments could be helpful to medical and other professionals in gathering evidence of beneficiaries' financial performance. However, half of the instruments identified by the committee are designed to assess financial competence in an office or clinical setting.
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2003. Impaired financial abilities in mild cognitive impairment: A direct assessment ap proach.
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2000. Assessing financial capacity in patients with Alzheimer disease: A conceptual model and prototype instrument.
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2000. The Independent Living Skills Survey: A comprehensive measure of the community functioning of severely and persis tently mentally ill individuals.
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likely to continue Optional: contextual factors could be used to inform determination after algorithm yielded results Financial Capacity 9 domains (activities) , 18 Financial Training Instrument (FCI)
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(2000) Developed to assess financial impairment (MCI)
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financial abilities, financial judgment, estate Structured management, cognitive interview functioning related to format; financial tasks, debt "objective management, support scoring resources guidelines"
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From page 149... ...
Adults (n = 178, ages Internal consistency People with a legally appointed 18-91, mean 53) with (Cronbach's alpha for administrator performed worse cognitive impairment subscales ranged from 0.54 on all dimensions of FCAI (defined by authors)
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From page 150... ...
These are based on the committee's judgment of which components are actually measured by an instrument, according to the committee's consensus definitions of financial capability, financial competence, financial knowledge, financial judgment, and financial performance (see Chapter 4)
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From page 151... ...
as people who "could best answer questions Factor analysis supported about them for past 6 expert-identified conceptual months" groupings of four subscales Patients with very Cronbach's alpha > 0.84 for Designed for assessment of mild to moderate each of 3 abilities assessed everyday decision-making cognitive impairment capacity in older adults, (n = 39) ; cognitively Moderate to strong particularly those with cognitive intact caregivers correlation with MacArthur disorders (n = 13)
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