Does Mrs X have capacity to make financial decisions? In the past, a psychologist undertaking a capacity assessment may have responded with a categorical yes or no, depending on the person’s diagnosis and level of cognitive impairment. A guardianship tribunal would subsequently judge that a person was either capable of autonomous decision making or in need of a substitute decision maker. This view is gradually changing and decision making capacity is now seen as lying on a spectrum. There is now recognition that capacity to make decisions is not static but is influenced by decision type, environmental factors, the quality of the information provided, and the person’s health status which may change over time. Guardianship orders are now limited in scope to particular categories of decisions.
Many psychologists agonise over undertaking a capacity assessment, with awareness that their reports can have crucial implications for the civil liberty and personal autonomy of the individuals concerned. However, the expertise and insights from psychologists’ assessments can provide vital information to assist a tribunal to make the least restrictive order possible, which is always the goal. This article aims to assist psychologists to provide information of most value to the tribunal in maximising the individual’s autonomy within the scope of a tribunal order2. For illustrative purposes, a particular focus on the capacity to make financial decisions has been taken.
Use of capacity assessment instruments
To try to objectively measure key skills for specific capacity decisions, standardised assessment tools which are valid and reliable should be selected. It is important to know which model of decision making the tool is based on, the country it was developed in (as legislation varies) and for what client population it was designed. Clinicians should be wary of score cut-offs that claim to differentiate between people with and without capacity.
Financial abilities range from basic skills of money handling and bill payment, to higher level skills of making decisions about investments and large assets. The Financial Capacity Instrument (Marson et al., 2000) is an example of an objective test examining a range of such financial skills. However, it is not yet clear which skills are fundamental to day-to-day financial management for different ages and client populations (Demakis, 2012).
Financial abilities vary greatly in the general population, due to differing socioeconomic background, education and financial experiences. Some clients may manage effectively in their own environment but perform poorly in an unfamiliar setting, while others may do well on formal testing due to high education or retained monetary skills but have difficulties at home for other reasons. Assessment tools are meant to supplement rather than replace clinical judgement, as a person’s decision making capacity cannot be divorced from the context in which they live.
Providing a comprehensive assessment
Capacity assessments require psychologists to integrate multiple sources of data (diagnoses, clinical interview, test results, informant reports) with what they know about the person’s past and current situation (risks and supports) and also their values (see the 2006 ABA and APA handbook for a detailed discussion of capacity assessment). To maximise the assistance to tribunals, capacity assessment reports should comprehensively cover the following information.
- Premorbid information. What was the person’s previous skill and experience in financial management? They might have been an accountant, or come from a culture where it was customary for a spouse to handle all finances. Lack of experience does not indicate lack of capacity.
- Longstanding values and wishes. Did the person take pride in saving money or paying bills on time? Did they like to help their children out financially?
- Risk and vulnerability. How complex are the person’s finances? Are there risks of exploitation or undue influence? Have there been recent changes in behaviour? Are they facing service cut-off or eviction? Prediction of future risk level is an often overlooked part of capacity assessment, but is fundamentally related to an assessment’s conclusion, as generally there is a need for a higher level of capacity as risk increases (e.g., management of large estates).
- Evidence of failure to manage finances. Evidence of an inability to manage daily finances (e.g., unpaid bills, lost ATM cards) is required, and this should not just be surmised on the basis of assessment of a cognitive disability.
- Availability of financial assistance. What informal assistance is available and what assistive measures have been tried (e.g., direct debits, family assisting with bill payments)? Who might the person trust to help manage finances? This may be family or friends but some people prefer an independent body such as the Public Trustee or an accountant.
Contributing beyond the initial assessment
Psychologists can contribute additional information in their reports to assist the tribunal to maximise the individual’s autonomy and agency within the restrictions of a guardianship or financial management order.
- Treatment recommendations. The report may indicate ways to manage mental health conditions, chronic medical conditions or communication and sensory problems which might be impacting on decision-making ability.
- Cognitive strategies. Assessment results can be used to help maximise a person’s involvement in decisions, and not just to search for evidence of inability. Identify which tasks are still within the person’s capability and which might be particularly difficult, and recommend strategies to support weak areas of cognition.
- Opinion on likelihood of change. It is vital to consider whether the person’s condition is stable, improving or deteriorating. It is desirable that financial management orders last no longer than necessary and are reviewed as needed. Psychologists need to be aware of the principle of providing the least restrictive approach and can assist clients to work towards revocation of an order. Some clients with stable or improving cognitive state might benefit from training in financial skills and awareness of ways others may try to exploit them. As their skills increase, demonstrating an ability to save even small amounts and avoid debt carries weight when asking for revocation of an order (on ‘regained capacity’ grounds). In other situations, an order might be revoked if it can be shown to cause the client distress and that previous risks have reduced (on ‘best interest’ grounds).
- Carer education. Family and carers can be advised about how best to support the person to remain independent for as long as possible. A carer might reduce complexity by setting up direct debits, helping with bills and arranging the pension to be paid in smaller, more frequent amounts.
- Detecting financial abuse. Be aware that close relatives are now the prime suspects for taking advantage of vulnerable individuals. Alzheimer’s Australia (2014) reported that children are not infrequently guilty of “inheritance impatience”. Be wary about relying on just one relative for information.
The vignettes presented below illustrate the least restrictive outcomes that are sought by guardianship tribunals and provide the opportunity for psychologists to see how assessment information may be used to maximise a person’s independence. The area of decision making capacity and how society views people with all types of disabilities is changing quite rapidly. Models of supportive decision making are in their infancy and likely to undergo considerable evolution as the system moves to allowing people with disabilities greater freedoms and the dignity of risk. Psychologists will be part of this change and will increasingly be asked to provide capacity assessments describing a person’s strengths and weaknesses in decision making and how they can be supported to make independent decisions for as long as possible.
|ILLUSTRATIVE CASE VIGNETTES
Alex is 18 and about to leave foster care to move into his own department of housing unit. He is due to receive a compensation payout. Alex has learning difficulties, has not had any training in budgeting and tends to immediately spend any money he receives. There is concern his relatives will try to influence how he manages his compensation money. It is recognised that Alex’s lack of financial skills are not unique in his age group but that he is vulnerable and faces particular risk of undue influence. A financial order is requested to manage the payout but recommendations are made that Alex receive financial skills training, have direct debits put in place and have his fortnightly benefit paid in smaller twice weekly amounts.
Guardianship and financial management
Margaret is 81, lives in her own home and has been assessed as having mild dementia. She is assessed with a financial capacity tool and demonstrates good understanding of daily financial skills. She is on a pension and takes pride in doing her own shopping, banking and bill paying. However, she is living in squalor and is at risk of falls. She repeatedly cancels services that she requires to live independently and refuses to pay service providers. She lacks insight into her care needs. Guardianship and financial management orders are recommended so that she can receive the services she needs to stay at home. It is recommended that her independence be maintained as much as possible and that she continues to receive the balance of her pension for shopping and other expenses.
Revocation of an order
Alice is 29 and has intellectual disability, OCD and anxiety. She has had a financial manager since she was 18. She has had difficulty budgeting, gives money to her boyfriend and signs up for expensive phone plans. She has had a debt to Centrelink and been in danger of eviction as she has cancelled her rental direct debit. Alice applies for revocation of her order. Her new case manager, with whom Alice has good rapport, gives cautious support and says that Alice is learning to say no when asked for money, has broken up with the problematic boyfriend and is paying down her debt. The financial order is causing a high level of distress, with Alice phoning the trustee several times a day to ask for her money back. Alice’s order is revoked as her risks are considered to be lessened, she has the safety net of a case manager who can reapply for a new order at any stage, and the financial order is causing her significant distress.
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- American Bar Association [ABA] Commission on Law and Aging and American Psychological Association [APA]. (2006). Assessment of older adults with diminished capacity: A handbook for psychologists. Washington DC: APA.
- Demakis, G. (2012). Introduction to basic issues in civil capacities. In G. Demakis (Ed.), Civil Capacities in Clinical Neuropsychology: Research findings and practical applications. New York: Oxford University Press.
- Marson, D., Sawrie, S., Snyder, S., McInturff, B., Stalvey, T., Boothe, A., Aldridge, T., Chatterjee, A. & Harrell, L. (2000). Assessing financial capacity in patients with Alzheimer’s disease: A conceptual model and prototype instrument. Archives of Neurology, 57, 877-884.
- Alzheimer’s Australia. (2014). Preventing financial abuse of people with dementia. Discussion Paper #10. Available at https://nsw.fightdementia.org.au/sites/default/files/20140618-NSW-Pub-DiscussionPaperFinancialAbuse.pdf
- The views expressed in this article are the author’s personal opinions and not those of the NSW Civil and Administrative Tribunal or NSW Health. 2 Guardianship tribunals and legislation are State entities, so psychologists need to become familiar with the terminology and legislation used in their particular State or Territory. (In the NT, orders are still made in the Magistrates Court.)