Dr Harper is Associate Research Scientist, Program for Recovery and Community Health, Yale University, New Haven, CT.
People with serious mental illness (SMI) and other mental health challenges often face financial difficulties, which can negatively affect well-being, and create barriers to recovery. Often when a patient is struggling financially, a common assumption is that they lack capacity to manage their finances, and financial control may be removed from them. For some, that might mean a conservator is appointed, or a power of attorney arranged. For those whose income is from disability benefits, such as Social Security Disability Income (SSDI) or Supplemental Security Income (SSI), it means finding someone who can be their representative payee. Approximately 20% of SSDI/SSI recipients have a payee, rising to approximately 30% for people qualifying on the basis of a psychiatric disability.1[PDF]
The current system does not offer people with SMI the range of support options that they need to manage their money safely and conveniently, with as much dignity, privacy, and autonomy as possible. While some people need and benefit from having their money controlled by someone else, it is not the answer for many others. Third-party control can risk damaging important relationships, especially if the payee or conservator is a family member, friend, or care provider. Even when people do need support with managing their money, not everyone needs to relinquish control to someone else entirely. Some people’s ability to manage their money fluctuates over time; others are perfectly able to manage some aspects of their finances, but not others.
We have mechanisms in place to provide substituted decision-making around money, but almost nothing to allow for supported financial decision-making. Many people have informal arrangements with family members and friends to get the help they need with managing their money. This can work well, but it can also easily lead to misunderstandings and exposes patients to the risk of financial exploitation and abuse.
Mechanisms have been developed for assessing the capacity of patients who are struggling to manage their money, and researchers have explored which type of support relationships work best for those who need help. Very little consideration, however, has been given to how financial service systems could be utilized to allow for effective shared and supported financial decision-making (“supportive banking”) (Figure).
Everyone needs access to basic banking services to manage their money effectively—to receive money, store it safely, pay bills, spend money throughout the month, and to save and/or borrow for unexpected, or planned, larger-than-normal expenses. People with disabilities are more than twice as likely to be “unbanked”—meaning they do not have a bank account. The number is highest among those with cognitive disabilities.2[PDF] The high rate of being unbanked is partly because people with disabilities are more likely to be poor, and poor people are more likely to be unbanked—but one third of the correlation between disability and being unbanked is specifically due to the disability.
Also troubling is that those who are banked are rarely offered banking services that could facilitate shared and supported financial decision making. People with a conservator or representative payee usually have no formal access to the bank account where their money is stored; they rely entirely on the person controlling their money to disburse funds to them. Some people may set up a joint account with someone they trust, or set up a power of attorney arrangement, both of which give that person full access to their funds. This requires a significant level of trust in the relationship, and even then, such an arrangement can expose the owner of the funds to the risk of exploitation and places a considerable burden of responsibility on the joint account holder or individual given power of attorney.
There is untapped potential for banks to provide better and different services and products to facilitate shared and supported decision-making by using existing technology while maintaining compliance with existing legal and regulatory requirements. Some supportive banking tools are already available, but generally only through independent financial technology (fintech) companies rather than mainstream banks. For example, specialty debit cards aimed at parents of children or adult children of elderly parents, such as those offered by TrueLink and Greenlight, allow them to give their loved one a degree of financial independence through a card with customizable spending controls.
Currently these cards are aimed at people who have legal control over another person’s finances, but the technology could be adapted to keep the financial control in the hands of those who seek to maintain some independence but at times still benefit from supported decision-making. Another fintech tool, EverSafe, aimed at the elderly population, enables users to allow a trusted friend or family member to view their bank accounts, and receive alerts about specific spending behaviors, but not to actually move any money. This type of “alert” technology could be very useful for people with SMI who may be struggling with increased impulsivity or memory problems leading to financial difficulties.
One significant limitation with these technologies is that they require a monthly or one-time payment and depend on reliable internet access, limiting their accessibility, particularly for people with very low incomes. Ideally, banks should offer similar supportive banking features for free as part of the menu of financial services that they offer to customers.
The author reports no conflicts of interest concerning the subject matter of this article.
1. Social Security Administration. Annual Statistical Report on the Social Security Disability Insurance Program, 2016. https://www.ssa.gov/policy/docs/statcomps/di_asr/2016/di_asr16.pdf. Accessed October 11, 2019.
2. Goodman N, Morris M. Banking Status and Financial Behaviors of Adults With Disabilities: Findings from the 2015 FDIC National Survey of Unbanked and Underbanked Households. April 25, 2017. https://www.fdic.gov/householdsurvey/2017/2017report.pdf. Accessed October 11, 2019.
3. Farr B, Cash B, Harper A. Banking for All: Why Financial Institutions Need to Offer Supportive Banking Features. Yale Law School/Yale Department of Psychiatry. April 2019. https://www.nationaldisabilityinstitute.org/wp-content/uploads/2019/06/cedc-report-april2019.pdf.