Veterans with psychiatric disabilities who are found incompetent to manage their finances are assigned trustees to directly receive and disburse their disability funds. The term representative payee refers to trustees assigned by the Social Security Administration (SSA), and the term for those assigned by the Veterans Benefits Administration (VBA) is fiduciaries. The generic term trustee will be used when referring to an individual responsible for managing another person’s benefits, regardless of the source of those benefits.
Because a trustee assignment is associated with the loss of legal rights and personal autonomy, the clinical utility of appointing trustees has been extensively researched.1-7 However, almost all the literature on trustees for adults with psychiatric disabilities has focused on services within the civilian sector, whereas little is known about military veterans with similar arrangements.
Veterans with psychiatric disabilities face challenges in managing money on a daily basis. Like other individuals with serious mental illnesses, they may have limitations in basic monetary skills associated with mild to severe cognitive deficits, experience difficulties in budgeting finances, and have impulsive spending habits during periods of acute psychosis, mania, or depression. Unlike civilians with severe mental illness, veterans are able to receive disability benefits from both the VBA and the SSA, thus having the potential for substantially greater income than is typical among nonveterans with psychiatric disabilities.
This increased income can increase veterans’ risk of debt through increased capacity to obtain credit cards and other unsecured loans as well as make them more vulnerable to financial exploitation and victimization. Veterans with incomes from both VBA and SSA face the added complication of dealing with 2 distinct, ever-changing, and often difficult-to-navigate benefit systems.
This article compares the VBA fiduciary program with the better-known SSA representative payment program, then discusses in detail the fiduciary program administered by the VBA, highlighting areas of particular relevance to clinicians, and ends with a review of the published literature on the VBA fiduciary program for individuals with severe mental illness.
Federal Trustee Programs
The magnitude of the 2 main federal trustee systems is remarkable. In 2010, 1.5 million adult beneficiaries who received Supplemental Security Income (SSI) had representative payees responsible for managing about $4 billion per month.8,9 Likewise, in 2010, almost 100,000 individuals receiving VBA benefits had fiduciaries responsible for overseeing about $100 million per month in disability compensation or pension benefits.10
The SSA has a single arrangement for provision of representative payee services in which the payee assignment can be indefinite, the responsibility for modification of the arrangement lies with the beneficiary, and oversight is minimal in both policy and practice.9 In contrast, the VBA, which oversees veterans’ pensions and disability benefits, administers several fiduciary arrangements that range in permanency and level of oversight (Table).
Permanent fiduciary appointments can be either federal or court appointed. Federal fiduciaries manage only VBA-appointed benefits, whereas court-appointed trustees (also known as guardians, fiduciaries, conservators, or curators, depending on the state) are appointed by the state to supervise all the financial assets of an incompetent beneficiary, potentially including both VBA and SSA benefits. Court-appointed trustees are usually designated when broader trust powers are needed to protect the beneficiary’s interests.11
A final VBA fiduciary arrangement is called a Supervised Direct Payment. The payment is made directly to a veteran with periodic supervision by a field examiner who assesses the veteran’s use of funds. This arrangement is used when a veteran has future potential to be deemed competent and released from VBA supervision. It allows the veteran a trial period of managing her/his funds generally for about a year but no longer than 36 months before transitioning to direct pay.11
Unlike SSA, which compensates total disability only, VBA has a rating system that estimates the degree to which a veteran is disabled and grants disability compensation accordingly.12 In 2009, the average monthly payment for all SSA recipients of SSI was $474; the average monthly payment for all recipients of disability benefits from VBA in that year was $925.13,14 For 2009, the federal maximum a SSA recipient could receive was only $674, although this could be supplemented by state funds. On the other hand, there is no set maximum for veterans’ benefits, which are determined through a formula that includes both percentage disability and number of dependents.12,13 In 2011, the average monthly payment for disabled veterans with fiduciaries was $2,540 per month.12 In a study of 49 veterans with trustees, the mean benefit from VBA was twice that of the SSA.15
Because VBA benefits are typically higher than those from SSA and because veterans can receive both SSA and VBA benefits, disabled veterans tend to have higher incomes than do civilians receiving disability benefits. Veterans also may receive lump sum payouts for past benefits, which can be substantial (often $20,000 to $40,000 and sometimes up to $100,000).16 For these reasons, identifying individuals who need a fiduciary and overseeing the management of funds once a fiduciary is assigned are critical.
