Marie-Claire Muir (MCM): Hi I’m Marie-Claire Muir, Communications Manager at the Australian Law Reform Commission. I’m here today with Matthew Corrigan who’s a Principal Legal Officer with the ALRC and he’s been working on the Elder Abuse Inquiry. Today we’re going to be talking about law reform proposals in the area of guardianship and financial administration. Thanks for joining us Matt.
Matthew Corrigan (MC): Thank you.
MCM: To kick off, can you briefly explain what is guardianship, what are we talking about when we talk about guardianship and financial administration?
MC: Historically we’ve had what were called guardianship tribunals where an individual could be appointed to act on behalf of someone who had lost legal capacity and this was seen as a protective function.
MCM: Sorry, can I just ask what are we talking about when we say ‘legal capacity’?
MC: When we’re talking about legal capacity we’re talking about a legal test as to whether or not someone is considered competent to make decisions for themselves, so it’s about decision-making ability and whether or not the person has sufficient mental capacity to make decisions. Now when we are talking about guardianship, we’re talking about personal and lifestyle decisions and when we’re talking about financial administrators we’re talking about the ability to manage one’s own financial affairs.
MCM: OK, thanks.
MC: These guardianship tribunals in most states and territories now have been subsumed as part of broader civil and administrative tribunals and these tribunals have the power to appoint a financial administrator or guardian when the tribunal is satisfied that a person doesn’t have the capacity to manage those aspects of their life due to a loss of legal capacity. Typically, what a tribunal does is it appoints an individual’s family member. The idea is not to, if possible, bring in an external party like the State Trustees if there is actually a family member available to perform that role.
One of the best protections in this space really is to put in place enduring documents, which we have discussed previously, where someone, well before they’re in a situation of losing legal capacity, they decide who they think in their family is the best person to make decisions on their behalf if they were to lose legal capacity and appoint them under those enduring documents. In those circumstances where there is an enduring power there is no need for the tribunal to appoint someone because there is already someone who is authorised to act on that person’s behalf.
MCM: OK, and of course we talked about enduring documents in a previous podcast and I know we have some recommendations around those because they can also be problematic, so I’d refer people to the previous podcast. There’s a link on the website to that. So getting back to guardianship, Matt why is this a site of elder abuse?
MC: Firstly, I think it’s important to recognise, and I think anyone reading our Discussion Paper will see that we understand that the majority of those who are appointed as financial administrators and guardians are family members that are taking on these burdens out of love and with the best interests of the person at heart and that in the vast majority of cases, these arrangements do not involve elder abuse. What we have also seen is that in some circumstances these arrangements because they give an individual complete power over financial matters or financial matters and lifestyle matters, over another person’s decisions in circumstances where the primary person has lost legal capacity, they are very vulnerable and there is a risk that those arrangements can be abused.
That abuse can really come in two forms, one might be a deliberate abuse where someone uses the powers to take money away from the person under the financial administration order, but actually the most common type of elder abuse is really mismanagement of the funds and misunderstanding or confusion as to what the nature of the financial administration order is and what the limits of those powers are.
MCM: What is the ALRC proposing in this area?
MC: Because, as I said, the vast majority of elder abuse in this space is predominately inadvertent—it comes from a lack of understanding not from some deliberate desire to do the wrong thing—our proposals in this space are really around ensuring that those who are appointed as financial administrators and guardians have the necessary information and they genuinely understand the nature of the obligation that they’re taking on. Our proposals are around things like making sure that there’s information available in tribunals so that people can access information about the nature of the role, that the person on accepting an appointment by a tribunal to be a financial administrator or guardian signs an undertaking that they understand the nature of their obligation, and so that there is less of a risk that a person will be appointed when they don’t know quite what they’re doing.
MCM: Moving on to social security, can you tell us what are the key areas of risk for older people in respect of social security payments?
MC: What we know is that the vast majority, I think it’s over three quarters, of older persons will receive some form of social security, whether it’s a full or part pension, and so the vast majority of older people at some stage in their life will be accessing social security in order to live. What has been identified by stakeholders is that there are three key areas where there is a risk of elder financial abuse in relation to social security arrangements. The first is in relation to payment nominee schemes. Payment nominee schemes are arrangements where the person who is entitled to, say the age care pension, appoints someone else to receive that payment on their behalf because they may, for example, appoint their son or daughter to manage their affairs so it is just easier if the pension goes directly to that person.
The second one is in relation to carer payments which can include payments to the carer in lieu of the age pension and the third area is the payment of the age pension itself. There are a couple of areas of risk where elder abuse, inadvertent or intentional, can occur. That firstly relates into the gifting rule under the age pension which is where because you have gifted funds of your own you may lose entitlement to the pension, either partly or in full. Secondly, in relation to what can be very complex areas or situations where the older person moves in with their family, either into their, for example, son or daughter’s home or in to a granny flat, and that may have inadvertent social security consequences which can create a dynamic which is conducive to financial abuse.
MCM: What proposals is the ALRC making to reduce these risks?
MC: Primarily what we’re suggesting here is that the Department of Human Services, which is responsible for Centrelink who administer the age pension, is that they develop an elder abuse strategy and that’s modelled on the Family and Domestic Violence Strategy which the Department of Human Services developed in order to respond to family violence. So what Centrelink and the Department of Human Services were doing was ensuring that the payment of social security, the making of social security payments in the context of family violence were supporting the person who had been the victim and making sure the payments were accessible and that the rules were not unintentionally making life difficult for those already in difficult situations. So similarly, in the elder abuse space we think there should be a strategy and that the rules and practices of Centrelink should take into account where elder abuse has happened. Under that strategy we’re suggesting that as a policy that Centrelink always speak directly to the recipient of the age pension, so that when payment nominee arrangements are put in place, Centrelink doesn’t just deal with the nominee and take signature and forms on face value but they actually speak to the older person and check that those arrangements have been put in place voluntarily and that the older person understands the nature of that arrangement. That similarly, if care payment is made, that the older person is aware that this person is their carer and checking that the basics of a care arrangement are put in place.
We think that Centrelink communications need to make clear both what the roles and responsibilities of the recipient of the age pension are, but also the third party what are their roles and responsibilities and explaining the differences in terms of those responsibilities. Thirdly, we think that Centrelink staff should be trained further to indentify and respond to elder abuse because, as I said at the outset, so many of our older people are at some point engaging with Centrelink, so it is a prime opportunity for the situations of abuse in the family that may otherwise not come to light come to light through interactions with Centrelink staff. So it’s important that they are able to identify those areas of concern.
MCM: Thanks Matt for talking us through that. The ALRC released a Discussion Paper in December last year. It includes discussion and proposals around a whole lot of legal areas related to elder abuse. We’re looking for feedback from the public in the form of submissions. You can get your submissions to us until 27 February 2017. You will find the full Discussion Paper on the ALRC website at www.alrc.gov.au. Thanks.