The significant amount of money veterans receive may put them at higher risk for financial exploitation. Given that the VBA disability payment is a reliable source of income and that many veterans with psychiatric disabilities live in environments of lower socioeconomic status, the veteran with a psychiatric disability may be especially vulnerable to financial manipulation. In an environment where many individuals have limited monetary resources, experience financial strain, and are frequently unemployed, it is unsurprising that, at best, family and friends may seek help and assistance from the veteran, and at worst, may maliciously exploit him or her. As a disinterested third party, it can be helpful for the clinician to explore potential disparities between veterans’ disability benefits and the income of individuals with whom the veteran resides.
Additionally, the amount of compensation fiduciaries can receive for their role can be significant. Fiduciaries can receive up to 4% of the yearly VBA benefits of a veteran for whom they are managing money, although family members and court-appointed fiduciaries are not allowed to receive such a commission without a special exception.11 Because large retroactive payments may be disbursed all at once, 4% of the total can be substantial.16
Unsurprisingly, the VBA fiduciary system suffers from a certain amount of fraud, prompting recent efforts in Congress to investigate the program more closely.28 Particular concern has been expressed by the House Committee on Veterans Affairs about misuse of funds by so-called professional fiduciaries who provide services for multiple veterans.29 Recent audits estimated that over $400 million in payments and estates were at risk for misuse and over $80 million might be subject to fraud.16 Until 2004, there was no policy in place to replace a veteran’s funds if those funds had been misused by her/his fiduciary.30 However, this was corrected when Congress passed the Veterans Benefits Improvement Act, and the VBA now reissues benefits if they were misused and the VBA was found negligent in its monitoring of the fiduciary.31 Unfortunately, it is also the VBA that makes the determination of negligence, raising concerns about conflict of interest.
Clinicians may contact their VBA Regional Office to request an evaluation of a veteran’s situation if they have concerns about the fiduciary arrangement, either based on their own observations or on complaints received from the veteran. A field examiner is required to investigate concerns about misuse of veteran funds.11
Fiduciary Oversight
The SSA has been criticized for its lack of close oversight of representative payees. In a recent report on the SSA representative payee program, the evaluators noted, “More broadly, the [SSA] program does not require careful accounting and reporting by payees, nor does the current system appear to be useful in detecting possible misuse of benefits by payees.”9
In contrast, the VBA fiduciary program has designated field examiners who play a role in the initial competence determination, fiduciary arrangement and selection, and oversight of the fiduciary arrangement. Once the VBA has been alerted that a veteran may require a fiduciary, a field examiner is dispatched to observe the individual’s living conditions, fund requirements, and capacity to handle benefits.11 After the initial contact, the field examiner makes a recommendation of the appropriate financial arrangement and prospective fiduciary.
Regardless of the type of fiduciary arrangement in place, the field examiner makes periodic follow-up visits to the beneficiary based on the individual situation. The minimum frequency of required contacts is at least once per year.11 However, visits can occur as infrequently as 36 months in particular situations (Table). During follow-up visits, the field examiner evaluates the beneficiary’s welfare, the performance of the fiduciary, the use of funds, the competency of the beneficiary, and the necessity to continue the fiduciary relationship.11
Although detailed oversight of fiduciaries is technically required, there are a limited number of field examiners to provide that oversight. In 2006, caseloads for field examiners ranged from 132 to 592 cases per employee.Recent auditing showed that programs with the highest staff case loads also had the highest number of deficiencies, suggesting that some field examiners may be unable to provide sufficient oversight to all their clients.16 The effectiveness of field examiners may suffer when they are responsible for very high numbers of veterans.16 Improving oversight of fiduciaries is a stated goal of the VA Office of Inspector General, although increasing the number of field examiners is not mentioned as a means to achieve this goal.32
The SSA does not systematically assess whether a beneficiary is able to resume control over his or her finances. Responsibility lies with the beneficiary to initiate a request to become his/her own payee by demonstrating ability to care for self by means of any evidence, including providing a doctor’s statement or an official copy of a court order. The SSA further cautions beneficiaries who are considering submitting proof of their capability to manage their money as a result of improvement in their condition that, “If SSA believes your condition has improved to the point that you no longer need a payee, we may reevaluate your eligibility for disability payments.”33 This may discourage beneficiaries from attempting to rescind the payeeship, as they potentially risk losing their disability benefits as well.
