Vulnerable old people are increasingly abused.
THE starkest indication that Australia has an ageing population is in a single medical fact: dementia is now the leading cause of disability in this country. And as we report on our Focus page today, it is a fact with consequences that extend well beyond the need to provide physical care to those who can no longer care for themselves. When Victoria's Guardianship and Administration Act was passed in 1986, its intended beneficiaries were people with intellectual disabilities, who at the time were increasingly moving out of institutions to live in the community. The act allowed the appointment of guardians to make decisions they could not make for themselves. That process has generally worked well, as has an institution created by the act for those unable to appoint a private guardian, the Office of the Public Advocate. In the course of 26 years, however, the range of people in need of guardianship has grown much wider than the drafters of the act were able to foresee.
As the Victorian Law Reform Commission notes in a report on the state's guardianship laws released earlier this year, impaired decision-making capacity is not an all-or-nothing concept. Those afflicted by it may be able to make some decisions by themselves while needing help with others, and the impairment may have several causes. It may arise from an intellectual disability the person has had since birth it may result from an accident or trauma from which the person might recover or it may be caused by the onset of dementia, with the level of impairment increasing gradually. Each of these requires a different response, which the existing law does not readily provide.
Since more than half of the people who now require guardianship have at some stage had a capacity to decide independently, the 440 recommendations in the commission's report include proposals for new forms of response to mental impairment. If the proposals become law, it will be possible to appoint "supporters" to help people make decisions, and the Victorian Civil and Administrative Tribunal will be able to authorise "co-decision-making" arrangements, under which a person being supported would not be excluded from the decision-making. The scope of these arrangements would vary considerably according to circumstances: they could refer to health or financial matters, or both.
The need to broaden the kinds of guardianship available, and to provide greater scrutiny of guardianship practices, is not only a recognition that there are different levels of impairment. Last year the managing director of State Trustees, Tony Fitzgerald, brought to public attention the fact that financial abuse of older people is increasing as Australians of the baby-boom generation move into their retirement years. A blatant and distressing case of such abuse, affecting the distinguished astronomer Albert Shimmins, is detailed in our Focus story. But Mr Fitzgerald was able to cite numerous examples, in which family or carers misappropriated funds from bank accounts, used powers of attorney to redirect pensions to other accounts or, in some cases, stole cash from safe-deposit boxes or sold homes below market value.
Many victims of the abuse of power of attorney are older women suffering from dementia. Powers of attorney relating to medical decisions are subject to some oversight by doctors and other healthcare professionals, but there is no equivalent scrutiny of power of attorney in financial matters. As a safeguard, the report proposes mandatory registration of enduring powers of attorney, and greater investigative powers for the Public Advocate.
Attorney-General Robert Clark has indicated that the Baillieu government supports the shift in attitudes to guardianship reflected in the commission's report. To protect the vulnerable, the government should implement the report's key recommendations as quickly as possible.
Frequently Asked Questions about this Article…
What are the proposed guardianship law reforms in Victoria and why should everyday investors care?
The Victorian Law Reform Commission recommends overhauling guardianship laws to reflect that impaired decision-making is not all-or-nothing. The proposals include new options such as appointed "supporters" and authorised "co-decision-making" arrangements for people who can make some decisions but need help with others. Everyday investors — particularly retirees and their families — should care because these reforms aim to reduce financial abuse and provide clearer safeguards for people who lose capacity, protecting pension payments, bank accounts and other assets.
How does dementia increase the risk of financial abuse among older Australians?
The article notes dementia is now the leading cause of disability in Australia and often causes a gradual loss of decision-making capacity. As baby-boomers enter retirement, cases of financial abuse have risen — including misappropriation of funds, misuse of powers of attorney, and sales of homes below market value. Many victims are older women with dementia who become vulnerable to family members or carers exploiting their finances.
What are “supporters” and “co‑decision‑making” and how could they help vulnerable people manage money?
Under the commission’s recommendations, "supporters" would be appointed to help people make decisions, and the Victorian Civil and Administrative Tribunal could authorise "co-decision-making" arrangements where the person being supported is still included in decision-making. These arrangements could cover health, financial matters or both, and are designed to preserve autonomy while adding safeguards for complex financial decisions.
What safeguards does the report suggest to prevent misuse of enduring powers of attorney?
The report proposes mandatory registration of enduring powers of attorney and greater investigative powers for the Office of the Public Advocate. It highlights that while medical powers of attorney have some professional oversight, financial powers currently lack equivalent scrutiny, leaving room for misuse that the recommendations aim to address.
What role do the Office of the Public Advocate and State Trustees play in protecting vulnerable adults' finances?
The Office of the Public Advocate was created under the 1986 act to act for people unable to appoint a private guardian, and the report recommends strengthening its investigative powers. State Trustees — noted in the article through comments by MD Tony Fitzgerald — have raised public concerns about increasing financial abuse, bringing attention to how carers or family members can misuse powers over older people’s money.
How widespread is financial abuse of older people, according to the article?
The article reports that financial abuse is increasing as more baby-boomers enter retirement. Examples given include redirecting pensions, misappropriating bank funds, stealing from safe-deposit boxes and selling homes below market value. While exact prevalence figures are not provided, the trend and many specific cases cited indicate a growing problem.
What can families and investors do now to reduce the risk of financial abuse, based on the article’s coverage?
The article highlights the importance of stronger legal safeguards — such as registration of enduring powers of attorney and better investigation by the Public Advocate — and urges rapid implementation of the commission’s key recommendations. Families should be aware of who holds financial powers of attorney for vulnerable relatives and support reforms that increase oversight; the piece also implies vigilance and early planning are important as dementia risk rises.
Has the Victorian government responded to the guardianship law recommendations and will changes be implemented?
Attorney‑General Robert Clark and the Baillieu government have indicated support for the shift in attitudes to guardianship reflected in the Victorian Law Reform Commission’s report. The article says the government should implement the report’s key recommendations quickly, but it does not state a timetable for legislative change.
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