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.

Contents

• The National Academies of SCIENCES • ENGINEERING • MEDICINE
• COMMITTEE TO EVALUATE THE SOCIAL SECURITY ADMINISTRATION'S CAPABILITY DETERMINATION PROCESS FOR ADULT BENEFICIARIES
• Reviewers
• Preface
• Acronyms and Abbreviations
• Summary
  • CAPABILITY DETERMINATION IN NON-SSA BENEFIT PROGRAMS
  • EFFECTS OF APPOINTMENT OF REPRESENTATIVE PAYEES ON BENEFICIARIES
  • FINANCIAL CAPABILITY
  • MENTAL AND PHYSICAL DISORDERS THAT MAY AFFECT FINANCIAL CAPABILITY
  • ASSESSMENT OF FINANCIAL COMPETENCE AND PERFORMANCE
  • RECOMMENDATIONS
• 1. Introduction
  • CONTEXT
  • CLARIFICATION OF STUDY SCOPE
  • TERMINOLOGY AND CONCEPTUAL MODEL
  • STUDY APPROACH
  • REPORT ORGANIZATION
  • REFERENCES
• 2. Review of the Social Security Administration and Other Selected Capability Determination Processes
  • OVERVIEW OF SSA AND OTHER SELECTED PROGRAMS
  • DEFINING THE BENEFICIARY'S ABILITY TO MANAGE FUNDS
  • TRIGGERS FOR CAPABILITY ASSESSMENT
  • TYPES AND SOURCES OF EVIDENCE
  • INSTRUCTIONS TO INFORMANTS
  • DEVELOPING EVIDENCE AND DETERMINING CAPABILITY
  • APPEALS PROCESSES
  • REVIEW
  • SUMMARY
  • REFERENCES
• 3. Effects of Appointment of Representative Payees on Beneficiaries
  • BENEFITS ASSOCIATED WITH THE APPOINTMENT OF A REPRESENTATIVE PAYEE
  • RISKS ASSOCIATED WITH THE APPOINTMENT OF A REPRESENTATIVE PAYEE
  • USE OF BENEFITS AS LEVERAGE
  • THE BENEFICIARY'S PERSPECTIVE
  • MINIMIZING THE IMPACT ON AUTONOMY OF HAVING A REPRESENTATIVE PAYEE
  • SUPPORTED DECISION MAKING
  • SUMMARY
  • REFERENCES
• 4. Abilities Required to Manage and Direct the Management of Benefits
  • FINANCIAL COMPETENCE
  • FINANCIAL PERFORMANCE
  • PREFERENCE FOR PERFORMANCE IN DETERMINING CAPABILITY
  • MENTAL AND PHYSICAL DISORDERS THAT MAY AFFECT FINANCIAL CAPABILITY
  • SUMMARY
  • REFERENCES
• 5. Methods and Measures for Assessing Financial Competence and Performance
  • OVERVIEW OF ASSESSMENT OF FINANCIAL CAPABILITY
  • INSTRUMENTS DESIGNED TO ASSESS FINANCIAL CAPABILITY
  • USES AND LIMITATIONS OF AVAILABLE ASSESSMENT INSTRUMENTS
  • CONSIDERATIONS AND CHALLENGES IN ASSESSMENT OF FINANCIAL COMPETENCE AND PERFORMANCE
  • SUMMARY
  • REFERENCES
• 6. Conclusions and Recommendations
  • EVIDENCE FOR DETERMINING FINANCIAL CAPABILITY
  • SYSTEMATIC IDENTIFICATION OF ADULT SSA BENEFICIARIES AT RISK FOR FINANCIAL INCAPABILITY
  • RESPONDING TO CHANGES IN CAPABILITY OVER TIME
  • INNOVATION AND EVALUATION
• APPENDIXES
  • Appendix A. Public Session Agendas
  • Appendix B. Glossary
  • Appendix C. Selected Forms
  • Appendix D. Biographical Sketches of Committee Members

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.