Dinika Roopani is Senior Research Officer at the Australian Institute of Family Studies working in the Family Law and Family Violence Team.
Powers of attorney and financial abuse of older people in Australia
Powers of attorney and financial abuse of older people in Australia
We describe powers of attorney arrangements, how these arrangements may protect older people from financial abuse, and acknowledge the risks of abuse.
Please note: This short article is intended to provide general information in summary form. It is not legal advice and should not be relied on as such. Legal and other professional advice should be sought by you or your organisation.
If you have concerns about potential or actual elder abuse, call the national 1800 ELDERHelp line on 1800 353 374. This service provides information on how you can access help, support and referrals in your area.
This short article describes powers of attorney and discusses the potential for such arrangements to contribute to the financial abuse of older people in Australia. Financial abuse is recognised as a form of elder abuse. Professionals working in the community welfare or aged care sectors may be required to help older Australians with a power of attorney arrangement. This article aims to increase sector professionals’ awareness of the existence of power of attorney arrangements and how these arrangements may protect older people from abuse; while also acknowledging the risks of abuse in this context.
What is a power of attorney?
A power of attorney is a legally binding document in which an individual gives another person(s) or trustee organisation the power to act for them and make decisions on their behalf (Australian Law Reform Commission [ALRC], 2017). A power of attorney allows an individual to plan for the future and choose someone they trust to manage a range of significant matters if they are unable to do so themselves in the future (such as financial matters, medical treatment or living arrangements).
There are two types of powers of attorney:
- a general or non-enduring power of attorney, which is granted for a specific purpose and period of time (e.g. while an individual is overseas)
- an enduring power of attorney, which endures, or continues, after an individual is no longer physically or mentally capable of making such decisions (Field & Cartwright, 2016).
The appointed person (attorney) has certain legal obligations, which include acting diligently as well as in the individual’s best interests (Australian Guardianship and Administration Council [AGAC], 2019). This arrangement can help an individual to protect themselves from being exploited or having their affairs mismanaged (ALRC, 2017).
The laws, terminology and processes around making a power of attorney vary across states and territories. The table below details the instruments available for appointing a decision maker for financial and/or other matters in each jurisdiction.
|Jurisdiction||Instruments for appointing a decision maker|
|Australian Capital Territory||Power of attorney|
|New South Wales||Power of attorney
Enduring guardianship (medical, lifestyle and personal)
|Northern Territory||Power of attorney (general/non-enduring only)
Advance personal plan (replaced enduring power of attorney in 2014)
|Queensland||Power of attorney|
|South Australia||Power of attorney
Advance care directive (medical, lifestyle and personal)
|Tasmania||Power of attorney
Enduring guardianship (medical, lifestyle and personal)
|Victoria||Power of attorney
Medical treatment decision maker
Supportive attorney (financial, personal)
|Western Australia||Power of attorney
Enduring power of guardianship (medical, lifestyle and personal)
The risk of financial abuse for older people
While a power of attorney is intended to benefit and protect an individual, there is potential for an appointed person to misuse this power (ALRC, 2017; Purser, Cockburn, Cross, & Jacmon, 2018; Tilse, Wilson, & Setterlund, 2003). A lack of understanding about an appointed person’s duties and obligations can contribute to the misuse of such arrangements (Wainer, Darzins, & Owada, 2010), and to the potential for there to be financial abuse.
Financial abuse may involve an appointed person using a financial power of attorney to withdraw money from the individual’s bank account for their own benefit. Financial abuse towards older people is a form of elder abuse – taking place when there is an ‘illegal or improper exploitation or use of funds or resources of the older person’ (World Health Organization [WHO], 2002).
Certain factors may make older people more vulnerable to financial abuse (Bagshaw, Wendt, Zannettino, & Adams, 2013):
- diminished decision-making capacity
- dependence on someone for care
- a family member feeling entitled to the older person’s assets.
National data on the prevalence of financial abuse among older people in Australia is not available at the time of publication (Kaspiew, Carson, & Rhoades, 2016). However, analysis of elder abuse helpline data in Victoria and Queensland indicates that financial abuse (which includes the abuse/misuse of a power of attorney) is the most common form of elder abuse and is most likely to be committed by a family member, usually a son or daughter (Elder Abuse Prevention Unit, 2018; Joosten, Dow, & Blakely, 2015; Wainer et al., 2010).
Implications for professionals working with older people and their families
Professionals working in the community welfare and aged care sectors may be required to act on, or give effect to, power of attorney arrangements. This may include carrying out instructions of an appointed person or assessing the capacity of an individual to enter into such arrangements.
Community welfare and aged care sector professionals may unknowingly facilitate abusive behaviour by an appointed person. For example, concerns have been raised about aged care professionals misunderstanding the purpose and scope of a power of attorney when carrying out the instructions of an appointed person (Senior Rights Victoria, 2019).
Professionals need awareness training on the laws behind power of attorney arrangements in their state or territory and on the warning signs of abuse and coercion.Professionals need to be aware of whether a power of attorney is currently active when acting on an arrangement, including what personal or financial matters are within scope (Senior Rights Victoria, 2019).
Understanding protective measures
Services and resources are available in each jurisdiction to help explain protective measures around a power of attorney (see the Australian Guardianship and Administration Council’s You Decide who Decides, pp. 40–43 for contacts in each jurisdiction). An individual can only revoke a power of attorney while they still have decision-making capacity; however, a person concerned about how a power of attorney is being used may be able to apply to a tribunal to have the appointment reviewed or revoked (AGAC, 2019; Field & Cartwright, 2016). If professionals are unsure of the protective measures available in certain circumstances, they can contact their state body for powers of attorney (listed in the table above), or consult the national Elder Abuse Helpline for local support and referrals.
Development of a consistent legal framework in Australia
Different power of attorney laws in each state and territory have contributed to significant confusion and complexity for people with such arrangements and for those acting on the arrangements. The Australian Government is exploring options to develop a nationally consistent legal framework for powers of attorney, as well as the feasibility of a national register so these documents can be registered and verified.These changes should reduce the complexity of such arrangements and improve their visibility for community welfare and aged care sector professionals, as well as for individuals and their families.
A power of attorney can provide Australians with a sense of security and control over their affairs; however, there is potential for these powers to be misused. In understanding power of attorney laws, warning signs of abuse or coercion, and protective measures available, community welfare and aged care sector professionals can work towards safeguarding older people in Australia.
- You decide who decides: Making an enduring power for financial decisions
This resource, funded by the Australian Government, is a national guide on making enduring powers of attorney for financial matters, with a focus on their usage in avoiding elder abuse.
- Elder abuse: Key issues and emerging evidence
This CFCA paper provides an overview of elder abuse in Australia. It discusses key issues involved in how elder abuse is defined and examines its prevalence, impact and associated risk factors, with a focus on the implications of recent research for policy and practice.
- Responding to elder abuse: Rights, safety and participation
This CFCA webinar outlines emerging evidence on the prevalence and risks associated with elder abuse, and discusses implications for policy and practice.
- Elder abuse: Understanding issues, frameworks and responses
This AIFS paper provides an overview of elder abuse in Australia – including its characteristics, context, and prevention.
- Australian Bankers’ Association. (2014). Responding to requests from a power of attorney or court-appointed administrator (Industry Guideline). Sydney: Australian Bankers’ Association.
- Australian Guardianship and Administration Council. (2019). You decide who decides: Making an enduring power for financial decisions. Carlton, Victoria: Office of the Public Advocate (State of Victoria).
- Australian Law Reform Commission. (2017). Elder abuse: A national legal response. Brisbane: Australian Law Reform Commission.
- Bagshaw, D., Wendt, S., Zannettino, L., & Adams, V. (2013). Financial abuse of older people by family members: Views and experiences of older Australians and their family members. Australian Social Work, 66(1), 86–103.
- Council of Attorneys-General. (2019). National Plan to Respond to the Abuse of Older Australians (Elder Abuse) 2019–2023. Canberra: Attorney-General’s Department. Retrieved from www.ag.gov.au/elderabuse
- Elder Abuse Prevention Unit. (2018). Year in review. Brisbane: UnitingCare.
- Field, S., & Cartwright, C. (2016). Dementia and your legal rights. Kingston, ACT: Alzheimer’s Australia. Retrieved from www.dementia.org.au/sites/default/files/NATIONAL/documents/Dementia-and-your-legal-rights.pdf
- Joosten, M., Dow, B., & Blakey, J. (2015). Profile of elder abuse in Victoria: Analysis of data about people seeking help from Seniors Rights Victoria. Summary report. Melbourne: National Ageing Research Institute and Seniors Rights Victoria.
- Kaspiew, R., Carson, R., & Rhoades, H. (2016). Elder abuse: Understanding issues, frameworks and responses. Melbourne: Australian Institute of Family Studies.
- Miskovski, K. (2014). Preventing financial abuse of people with dementia. Sydney: Alzheimer’s Australia.
- Purser, K., Cockburn, T., Cross, C., & Jacmon, H. (2018). Alleged financial abuse of those under an enduring power of attorney: An exploratory study. British Journal of Social Work, 48(4), 887–905.
- Senior Rights Victoria. (2019). Submission to the Royal Commission into Aged Care Quality and Safety. Melbourne: Senior Rights Victoria.
- Tilse, C., Wilson, J., & Setterlund, D. (2003). The mismanagement of the assets of older people: The concerns and actions of aged care practitioners in Queensland. Australasian Journal on Ageing, 22(1) 9–14.
- Wainer, J., Darzins, P., & Owada, K. (2010). Prevalence of financial elder abuse in Victoria: Protecting Elders’ Assets Study. Melbourne: Monash University.
- World Health Organization. (2002). Missing voices: Views of older persons on elder abuse. Geneva: World Health Organization.
1 See also Miskovski (2014) for findings relating to financial abuse involving powers of attorney perpetrated against people with dementia.
2 For example, concerns about financial abuse has led to the development of financial industry guidelines on power of attorney arrangements (Australian Bankers’ Association, 2014).
3 See National Plan to Respond to the Abuse of Older Australians (Elder Abuse) 2019–2023 (Council of Attorneys-General, 2019).
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