Is Capability to Manage Finances Stable Over Time?

Abstract

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.

Introduction

It has been asserted that money mismanagement exacerbates mental health problems (Kiely, Leach, Olesen, & Butterworth, 2015) and contributes to homelessness, hospitalization and criminal activity(Conrad et al., 1998; Elbogen, Sullivan, Wolfe, Wagner, & Beckham, 2013; Moore, Black, & Rosen, 2016). Additionally, individuals with serious mental illness who mismanage their funds, especially people with concomitant substance use, are more likely to be exploited Claycomb et al., 2013). Several types of help managing funds have been found to promote well-being(Elbogen, Bradford, & Swartz, 2013; Rosen, 2011).

The Social Security Administration’s Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) programs assign fiduciaries to beneficiaries with disabilities who are deemed incapable of managing or directing the management of benefit payments in their own best interest. Legal judgments that one is incapable of managing one’s funds are, at least initially, resented (Brotman & Muller, 1990; Dixon, Turner, Krauss, Scott, & McNary, 1999; Elbogen, Swanson, Swartz, & Van Dorn, 2005). These legal determinations of financial incapability need to be made in a way that empowers individuals. Having a determination process that is transparent, consistently applied, and flexible can help maximize an individual’s autonomy. However, financial capability is a complex construct that is not easily assessed (Black et al., 2014; Lazar, Black, McMahon, O’Shea, & Rosen, 2015; Lazar et al., 2016).

Financial capability determinations have historically been inconsistent, leaving individuals without knowing when to request termination of the requirement to be assigned a fiduciary or when to request additonal supports. A report by the Office of the Inspector General suggested, based on a sample of 275 recipients whom they interviewed, that a substantial proportion of beneficiaries deemed capable of managing their benefits in fact are not (Social Security Administration & Office of the Inspector General, 2012). Responding to these concerns, a landmark report by the Institutes of Medicine (IOM) recommended procedures to determine and periodically reassess beneficiaries’ capability (Appelbaum, Spicer, & Valliere, 2016).

In this paper, we adopt the IOM Report’s conceptualization of financial capability, which emphasizes real-world financial performance, and considers financial skills one might possess (e.g. financial knowledge, money management skills) as relevant insofar as they impact real-world choices and behavior. Individual and environmental factors are both considered when determining an individual’s financial capability. Our and the IOM’s conceptualization of financial capability overlaps, but differs from, the functionings and capabilities described in Amartya Sen and Martha Nussbaum’s work in developmental economics (Nussbaum & Sen, 1993). Like Drs. Sen and Nussbaum’s definitions, our operational definition of financial capability incorporates an individual’s realized financial management (referred to by Drs. Sen and Nussbaum as “functionings”). However, our (and SSA’s) definition does not control for the real opportunities to achieve financial well-being (“capabilities,” as described by Drs. Sen and Nussbaum) that may be limited by the environment (e.g. lack of safe, inexpensive banking). Thus, someone who has stronger social supports and/or a more privileged environment is more likely to function better financially and to be found financially capable by our definition than someone with the same amount of financial knowledge but fewer supports or a more challenging, less supportive environment. The IOM Report noted that capability to manage funds changes over time because beneficiaries may have episodic symptoms, their treatment engagement may fluctuate, and their home situations may change between environments that foster independent funds management and those that undermine it. However, little is known about how much peoples’ capability fluctuates, in which direction (towards capability or incapability), what aspects of capability fluctuate, and whether there are any personal or contextual factors that might predict someone’s future capability. Additionally, the IOM report called for beneficiaries’ financial capability to be reassessed periodically, but did not provide recommendations about how frequently reassessments should occur or the procedures for conducting reassessment. These recommendations should be developed after policy makers have a better understanding about how beneficiaries’ financial capability fluctuates over time.

The Financial Incapability Structured Clinical Assessment done Longitudinally (FISCAL) Lazar et al., 2016) is a comprehensive assessment developed to assess financial capability in persons with serious mental illness who receive SSI and/or SSDI benefits. In a population of people with dual psychiatric and substance use disorders being treated in a hospital or in an intensive outpatient program, the FISCAL had very good inter-rater reliability and demonstrated good convergent validity and discriminant validity(Lazar et al., 2016).

In this paper, we used the FISCAL to assess the financial capability of 132 SSI and SSDI beneficiaries with serious mental illness at two times, twenty-four weeks apart, in order to describe the stability of capability, the direction of changes between capability and incapability, and features at baseline that predicted changes in capability twenty-four weeks later.

Methods

This study was approved by Yale University Institutional Review Board. Enrollment was conducted between October 2012 and October 2014.

Participants were recruited from four intensive outpatient programs and one inpatient psychiatric hospital in Connecticut. Eligible participants were English speakers between the ages of 18 and 65, received at least $600 from SSI or SSDI each month, and had a DSM-IV substance use diagnosis and a current or past adult Axis I or Axis II psychiatric diagnosis. Participants were excluded if they had a representative payee or conservator managing their money at the time of eligibility screening.

A total of 168 participants were screened and determined eligible for the study. Of those, 157 completed all baseline assessments. Of the 157, 132 participants (84%) completed twenty-four week follow-up assessments and were included in final analysis.

Participants were paid $100 for completing baseline assessments and $100 for completing follow-up assessments.

Procedure

Financial capability was measured using the FISCAL (Lazar et al., 2016). The FISCAL is a comprehensive assessment of financial capability that involves having an assessor use all available data over the past twenty-four weeks to rate an individual’s financial functioning on four criteria:

• (1)Money spent on nonessential items resulted in failure to meet basic needs;
• (2)Substantial amounts of money were spent on something that harmed the participant;
• (3)Misspending was likely to continue; and
• (4)Contextual factors contributed to the determination of capability. This criterion incorporated aspects of an individual’s actual environment or circumstance that might affect his or her ability to manage finances. Examples include psychiatric symptoms (episodes of disorganized behavior or impaired judgement), and circumstantial (change in housing situation, exit or entrance into a treatment program).

FISCAL assessors collate all data available relating to an individual’s financial and general functioning, reconcile discrepancies between the sources of information, and then rate the individual on each of the four FISCAL capability criteria. An algorithm is then applied to derive a dichotomous capability determination (capable vs. incapable) from the four criteria.

Assessments

In this study, financial capability was assessed at baseline by a contracted Master’s or Doctoral level clinician, and then twenty-four weeks later by a second assessor blind to the baseline FISCAL rating. Data available for the FISCAL ratings consisted of four sources of information:

• (a)Semi-structured interview (instrument available at www.behaviorchange.yale.edu)

FISCAL assessors conducted individual semi-structured interviews with participants at baseline and follow-up. The interview consisted of questions about the participant’s last month’s expenditures, recent history of living situations, periods when the participant did not have enough money for basic needs and their plans for the future. An earlier version of this interview correlated positively with another client-rated assessment of money mismanagement (r = .44) (Black et al., 2008).

• (b)Medical chart review

Assessors used a standardized form to extract criteria-relevant data from intake forms, progress notes, DSM diagnoses, substance abuse evaluations, urine toxicology results, and other records in the medical chart.

• (c)Clinician assessment of financial incapability

Participants’ identified clinicians used the Clinician Assessment of Financial Incapability (CAFI) (Black et al., 2014) to assess their client’s spending, bill-paying, management of funds, psychiatric symptoms, and ability to avoid financial victimization. The CAFI was not re-administered at follow-up.

• (d)Review of assessment battery

Research assistants administered an identical battery of assessments to participants at baseline and follow-up. The assessment battery collected the following measures:

• A structured questionnaire documented participant’s demographic characteristics, housing situation over the past sixty days, education and employment status, finances, psychiatric history and legal history.

• Substance use and homelessness were assessed with a timeline follow-back interview technique (Carey, 1997; Sobell, Maisto, Sobell, & Cooper, 1979; Sobell & Sobell, 1992) that uses a calendar with memory aids (key and anchor dates) to cue accurate recall of daily occurrence of events. Homelessness was calculated as the number of days in the past 60 that a respondent reported spending a night in urban outdoors (e.g. sidewalk, doorway, park), rural outdoors (e.g. woods, tent, cave), abandoned or public building (e.g. train station), automobile, and shelter. Alcohol and drug use was calculated as the number of days in the past 28 that a respondent reported use of alcohol or any drugs.

• Self-reported money mismanagement was assessed using the Money Mismanagement Measure (M3) (Conrad et al., 2006) with questions referring to the past 28 days. The Money Mismanagement Measure is a 28-item, self-reported screening assessment of money mismanagement for people with serious mental illnesses. Questions ask about the participant’s difficulties meeting basic needs, budgeting, paying bills, and keeping track of funds.

• Psychological distress was assessed using the Brief Symptom Inventory (BSI)(Derogatis, 1992; Derogatis & Melisaratos, 1983), a 53-item self-reported measure of general psychopathology. Participant rate, on a five point Likert scale ranging from “not at all” to “extremely”, how distressed they were in the past week by various symptoms. The BSI has nine subscales reflecting primary symptom dimensions; the depression subscale reflects a broad range of clinical depression symptoms.

Data Analysis

Diagnostic stability was assessed using McNemar’s test to compare FISCAL capability determinations at baseline and follow-up. McNemar’s test was also used to determine the stability of the two incapability criteria (basic needs not met due to misspending; money spent on harmful things).

We then assessed what factors had changed in people whose financial capability had changed. Individuals who were rated incapable at baseline but transitioned to capable at follow-up were compared to those that were incapable at baseline and remained incapable at follow-up using t-tests, Mann-Whitney U tests (MWU), or Chi-square tests (x²). We then conducted similar analyses among individuals who were capable at baseline: comparing those who became incapable at follow-up to those who remained capable at follow-up.

The FISCAL’s predictive validity was assessed using binary logistic regression analysis, testing the hypotheses that baseline FISCAL capability determinations would significantly predict week twenty-four capability determinations. To identify additional predictors, we then entered together predictors hypothesized to account for week-24 status. Predictors included participant age, diagnosis of a psychotic disorder, psychological distress as measured by BSI total score, and baseline number of days of substance use, alcohol use and alcohol use to intoxication. Predictors not statistically significant at α=.05 were trimmed from the model.

Statistical analyses were conducting using IBM SPSS Statistics 19 software.

Results

Description of Participants

A total of 168 participants were enrolled into the study. Of those, 157 met all eligibility criteria and completed the baseline assessment battery. The majority (84%, n=132) completed all follow-up assessments and were included in final analysis. Individuals not included in the final analysis were slightly younger than participants who completed all study assessments (41.9 years, SD=9.1 vs. 46.2 years, SD=9.8, p=.03) but did not significantly differ from the final sample on any other demographic or clinical characteristics.

Participants were 52% male and reported a mean age of 46.2 years (SD=9.8 years). Participants identified as white (51%), black (28%), or Hispanic (21%). Participants reported a mean education of 11.7 years (SD=2.6 years) and a median income of $886 (IQR = 524). Nearly a quarter (n=30, 23%) of participants had a diagnosed psychotic disorder.

The majority (92%) of participants reported having been treated in a hospital for a psychological or emotional problem at least once (median = 6 times, IQR = 7), and nearly a quarter (n=30, 23%) reported having been assigned a payee in the past.

At baseline, the majority of participants (n=115, 87%) reported drinking two or fewer drinks over the past twenty-eight days (mean 1.7, range 0–28); only 22 (17%) reported drinking to intoxication at least one day in the past twenty-eight (mean 1.3, range 0–28). Over a third of the sample (n=49, 37%) reported using an illicit drug in the past twenty-eight days (mean 3.4, range 0–28). Thirteen percent (n=17) of the sample reported at least one day of recent homelessness (being homeless in the past sixty days).

At week twenty-four, 110 (83%) participants reported drinking two or fewer drinks over the past twenty-eight days (mean=2.23, range 0–28), 25 (19%) reported drinking to intoxication at least one day in the past twenty-eight (mean 1.7, range 0–28), 51 (39%) reported using an illicit drug, and 10 (8%) reported recent homelessness.

Financial Capability at Baseline

Over half (n=72, 55%) of participants were determined to be financially incapable at baseline. Of the 72 incapable at baseline, 47 (65%) were incapable due to misspending that resulted in failure to meet basic needs, 62 (86%) were incapable due to misspending on harmful things, and 40 (56%) were incapable due to both of these criteria. An additional 3 participants were determined to be financially incapable due to contextual factors. (Table 1)

Table 1.

Incapability by criteria

Criteria	Baseline		Week 24 follow-up
	Number	Percent	Number	Percent
Total no. participants rated incapable	72	55%	43	33%
Unmet basic needs	47	36%	18	14%
Harmful spending	62	47%	34	26%
Both unmet needs and harmful spending	40	30%	11	8%
Contextual factors	3	2% a	2	2% b

^a2 cases of impaired judgment and disorganized behavior; 1 case in which a physical condition suggested the person was incapable

^b2 cases of impaired judgment and disorganized behavior

Financial Capability at Follow-Up

Only a third (n=43, 33%) of participants were determined to be financially incapable at the twenty-four week follow-up. Of those 43, 18 (42%) were incapable due to misspending that resulted in failure to meet basic needs, 34 (79%) were incapable due to misspending on harmful things, 11 (26%) due to both misspending that resulted in failure to meet basic needs and misspending on harmful substances, and 2 (5%) were incapable due to contextual factors. (Table 1)

Diagnostic Stability

Two thirds (n=87, 66%) of participants had stable capability ratings from baseline to follow-up; 35 (27%) participants were rated incapable at baseline and remained incapable at follow-up, and 52 (39%) participants were rated capable at baseline and remained capable at follow-up. Of those with unstable capability ratings, only 8 (6%) participants move from capable at baseline to incapable at follow-up, whereas 37 (28%) participants moved from incapable to capable. (Table 2).

Table 2.

Stability of financial capability construct

Category	Number	Percent
Stable incapable	35	27%
Unstable incapable to capable	37	28%
Unstable capable to incapable	8	6%
Stable capable	52	39%

Comparison of People with Stable Capability Ratings to Those whose status Switched

Approximately half (51%) of individuals rated incapable at baseline were rated capable at follow-up. Table 3 compares individuals who were rated incapable at both baseline and follow-up (stable incapable individuals) to those who were incapable at baseline but became capable at follow-up (became capable individuals). Compared to stable incapable individuals, those who became capable at follow-up were less likely to have a psychotic disorder diagnosis (p=.011), and had a greater reduction in psychiatric distress over time (p=.026). Those who became capable also reported a greater reduction in the number of days drinking in the past 28 days compared to individuals who remained incapable (p=.007).

Table 3.

Stable incapable individuals vs. individuals who transitioned from incapable to capable

Demographic	Stable incapable (n=35)	Incapable to capable (n=37)	Statistic
Psychiatric diagnosis  Psychotic disorder  All other psychiatric disorders	14 21	5 32	X2=6.496 P=.011
Ever had a payee  No  Yes	25 10	28 9	X2=.167 P=.683
Change in 60 day Homelessness1 ,mean rank	36.96	36.07	MWU=631.5 P=.773
Change in depression sum score1, mean [range]	.68 [−16,25]	−3.12 [−19,13]	MWU=466.5 P=.087
Change in BSI1, mean [range]	6.35 [−70,153]	−18.03 [−115,68]	MWU=422.5 P=.026
Change in M31, mean [range]	−1.44 [−27,18]	−3.36 [−15,10]	MWU=528.5 P=.326
Change in # days Alcohol use in past 28 days1, mean [range]	2.18 [−9,19]	−.11 [−11,19]	MWU=424.5 P=.007
Change in # days Alcohol to intoxication in past 28 days1, mean [range]	2.18 [−4,21]	.03 [−11,18]	MWU=523.0 P=.094
Change in # days drug use in past 28 days1, mean [range]	1.76 [−23,23]	.67 [−12,27]	MWU=594.5 P=.533

¹Change scores reflect follow-up minus baseline scores, so a positive value indicates follow-up score was greater than baseline score.

Transitioning in the other direction, eight individuals rated capable at baseline were classified as incapable at follow-up. Table 4 compares individuals who were rated capable at both baseline and follow-up (stable capable individuals) to those that were capable at baseline but became incapable at follow-up (became incapable individuals). The two groups differed in the expected direction on change in psychological distress, but no differences were statistically significant, given the sample of only eight people who transitioned to incapable. Individuals who became incapable tended to be younger, although this finding was also not statistically significant (p=.063).

Table 4.

Stable capable individuals vs. individuals who transitioned from capable to incapable

Demographic	Stable Capable (n=52)	Capable to Incapable (n=8)	Statistic
Age, mean [SD]	47.06 [9.3]	38.75 [12.88]	MWU=122.5 P=.063
Psychiatric diagnosis  Psychotic disorder  All other psychiatric disorders	8 44	3 5	X2=2.26 P=.132
Ever had a payee  No  Yes	40 11	6 2	X2=.047 P=.828
Change in 60 day Homelessness1 ,mean rank	30.35	31.50	MWU=200.00 P=.576
Change in depression sum score1, mean [range]	−1.46 [−14,8]	.63 [−12,15]	MWU=169.5 P=.443
Change in BSI1, mean [range]	−6.08 [−76,47]	3.38 [−55,64]	MWU=162.0 P=.352
Change in M31, mean [range]	−1.60 [−16,10]	1.38 [−9,9]	MWU=128.5 P=.093
Change in # days Alcohol use in past 28 days1, mean [range]	.22 [−11,9]	−1.88 [−25,8]	MWU=176.5 P=.433
Change in # days Alcohol to intoxication in past 28 days1, mean [range]	−.16 [−20,9]	−1.88 [−25,8]	MWU=171.5 P=.347
Change in # days drug use in past 28 days1, mean [range]	−.32 [−21,26]	−5.38 [−15,1]	MWU=138.0 P=.078

¹Change scores reflect follow-up minus baseline scores, so a positive value indicates follow-up score was greater than baseline score.

Baseline Characteristics that Predict Financial Capability

Table 5 reports the results of a binary logistic regression predicting week-24 capability ratings from baseline variables. Baseline capability rating, having a psychotic diagnosis, and number of days of drug use at baseline were all significant predictors. Holding the other variables constant, individuals rated capable at baseline had 8.5 times greater odds of being capable at follow-up than those rated not capable (p=<.001, 95% CI 3.0–24.3). Individuals with a psychotic diagnosis at baseline have odds of being rated capable only 23% as great as the odds for individuals without such diagnosis (OR=.225, 95% CI=.083-.608; p=.003). For each additional day of drug use at baseline, the odds of being rated capable were reduced by 10% (OR=.90, 95% CI =.846-.957; p=.001).

Table 5.

Baseline variables predicting follow-up capability rating

Factor	B	Standard error	Wald	Sig	Exp(B)	95% CI
Capability determination	2.15	.53	16.31	<.01	8.56	3.02–24.28
Psychotic disorder	−1.49	.51	8.64	<.01	.23	.08−.61
# days any drug use in past 28 days	−.11	.03	11.24	<.01	.90	.85−.96

Discussion

Financial capability was fairly stable over the twenty-four week study period; two thirds of participants had the same capability determination at baseline as they did at follow-up. Among those whose capability changed, most people transitioned to capable over time and only a few individuals transitioned to incapable. The high rate of individuals transitioning to capable might relate to the fact that individuals were more likely to start out as incapable due to having recently needed inpatient or intensive outpatient care. The inpatient and outpatient intensive programs that participants were enrolled in at the time of their first interview offered a number of supports, including individual case management, medication monitoring, and daily group and individual counseling sessions that focused on a wide array of topics including stress management, substance use counseling, and spirituality. Other supports, such as sober housing programs, were also available. It is not surprising that, after being offered structured care and additional supports, many acutely ill individuals who were initially rated incapable transitioned to capable.

Lack of information may have contributed slightly to the lower rate of incapability at follow-up. FISCAL assessors had somewhat more information available on which to rate individuals at baseline, when participants were in intensive treatment, as compared to follow-up, where recent treatment and clinician notes might not have been available., However the majority of FISCAL assessors said they were “mostly certain” or “completely certain” they had sufficient data to make the capability rating (78% at baseline; 71% at follow-up), and the majority of FISCAL assessors were “mostly certain” or “completely certain” that they had made an accurate capability rating (78% at baseline; 73% at follow-up).

The high incidence of incapability raised the question of whether an overly inclusive definition of incapability was used, but related measures describe the extent of these participants’ difficulties. Of the 72 participants determined to be financially incapable at baseline, 23 (32%) had been homeless within the preceding six months as compared to 10 participants (17%) who were rated capable. Those rated incapable had spent a median of 92.5% of the past five years with active substance use (IQR=30), whereas those rated capable had a median of 52.5% of the past five years with active substance use (IQR=75.5). Over the preceding six months, participants rated incapable spent a median of $12 on alcohol in the month with most use (IQR=60), and a median of $200 on drugs in the month with most use (IQR=789.25); participants rated capable spent a median of $0.00 on alcohol and on drugs in the month with most use (IQR=60 alcohol, IQR=50 drugs).

These findings support the IOM Report’s recommendation to periodically reassess beneficiaries’ capability. While no reassessment schedule has been proposed by the IOM, our data suggest that individuals found to be incapable of managing their finances when in crisis should be reassessed no later than six months after the crisis period determination, as our data show that over half (37/72) of those rated incapable at a time of crisis were capable twenty-four weeks later. Only after such a reassessment schedule is implemented should temporary assignment of fiduciaries to beneficiaries in crisis be considered, and only when less restrictive supports have been assessed to be insufficient.

Our findings suggest that past capability (as measured by FISCAL) is a good predictor of future capability. Over 86% (n=52) of individuals rated capable at baseline remained capable twenty-four weeks later. This suggests that individuals who are able to manage their finances through a time of crisis will likely continue to manage their finances well.

Our data show that financial capability prediction can be improved by considering psychotic diagnosis, substance use, and psychiatric distress. Having a psychotic disorder was significantly associated with a sustained pattern of incapability. This finding suggests that the deleterious effects psychotic disorders have on financial management are more enduring, and is consistent with other studies that show an association between having a diagnosis of schizophrenia and being assigned a payee (Rosen, McMahon, & Rosenheck, 2007). Financial incapability among participants without a psychotic disorder was more likely than not to be temporary. Financial capability among individuals without psychotic disorders may be context-specific (e.g., a source of stable support has been lost) or fluctuate with episodic psychiatric symptoms. The findings are consistent with other reports that people in poverty and people with serious mental illness frequently transition between being housed and being homeless (Gabrielian et al., 2015; Kuno, Rothbard, Averyt, & Culhane, 2000), and between using and not using drugs (Bahorik, Newhill, & Eack, 2013; Drake, Xie, McHugo, & Shumway, 2004).

The high rate of financial incapability in this sample suggests a need for flexible financial supports for people with serious mental illnesses and addiction. Some of the deleterious effects of money mismanagement can be mitigated by early detection and intervention. Developing a system to trigger a financial capability assessment – such as admission into a psychiatric hospital or intensive outpatient program– would help to identify beneficiaries who need supports. Such a system should be designed to maximize autonomy. It might involve having a case worker provide financial management services and, only as a last resort, temporary payeeship. We have described such a financially-focused voluntary intervention called Advisor-Teller-Money Management (ATM) in which a client’s funds are stored by a third party to allow for spending to be planned and thought through, but unlike in a fiduciary arrangement, decisions about spending are ultimately made by the client (Rosen, 2003). We have shown in a clinical trial targeting cocaine use that clients receiving this intervention were significantly more likely to be abstinent from cocaine, and were significantly less likely to have spent money on substances compared to clients who did not receive the intervention (Rosen, Rounsaville, Ablondi, Black, & Rosenheck, 2010). Clients liked the intervention, and several asked for a more permanent fiduciary arrangement (Rosen, Ablondi, Black, Serowik, & Rowe, 2014). A time-limited money management arrangement, to be reassessed after no more than six months, might ameliorate the more common situation in which beneficiaries’ do not want to be assigned fiduciaries (Dixon, Turner, Krauss, Scott, & McNary, 1999).

There is a need for more information concerning when, how, and how often financial capability determinations are made. The results presented here provide additional information about the validity and reliability of the FISCAL as an instrument to standardize assessment of financial capability. The specific data elements in the FISCAL provide guidance to anyone who is involved in assessing a beneficiary’s financial capability. The predictors of financial capability we identified may help policy makers and clinicians better identify individuals that may need more financial assistance.

Our data suggest that SSA is more likely to not assign a payee to a beneficiary in need than it is to require a payee unnecessarily. The FISCAL can help clinicians identify beneficiaries in need. Identification is an important step toward getting beneficiaries supports – anything from financial skills training, money management counseling, or being assigned a fiduciary – needed to prevent the ill effects of poor money management.

A challenge to translating our findings to SSA policy is that the capability assessment and re-assessment we describe requires SSA staff with the time and resources to conduct the assessments. SSA’s current procedures for determining capability are detailed; they involve considering legal, medical and lay evidence, and training SSA personnel to collect and evaluate such evidence.

This study has several limitations. First, financial capability in this study was measured and defined by the FISCAL assessment, which bases financial incapability on demonstrated misspending on non-essentials and harmful substances. The IOM Report describes other ways of defining and measuring financial capability, some of which take into consideration substance use but may not emphasize it as much as the FISCAL (Appelbaum, Spicer, & Valliere, 2016). A second limitation is that this study had a moderate sample size and participants were recruited from several inpatient and outpatient programs in Connecticut. It is unclear how generalizable the finding would be to other populations who do not have psychiatric and substance use disorders.