Reducing the risk

6.29       Stakeholders suggested that more could be done to prevent abuse by guardians and financial administrators, with particular emphasis on education and redress.[36] The ALRC views the provision of information to proposed guardians and financial administrators to be a key safeguard against elder abuse, and asks below how best to achieve this.

Enhanced understanding of roles and responsibilities

Proposal 6–1              Newly-appointed non-professional guardians and financial administrators should be informed of the scope of their roles, responsibilities and obligations.

6.30       Understanding the scope and limits of guardian and financial administration appointments is paramount to reducing abuse. Abuse of older persons by guardians or financial administrators can be inadvertent. For example, administrators may be unaware of the requirement to keep assets separate from their own. Informal arrangements in place prior to the commencement of the order may persist, which may involve conduct in breach of the appointment.

6.31       Abuse can also happen where the representative is indifferent or reckless as to their legal responsibilities. There may also be a small cohort of people who deliberately set out to exploit or abuse persons.[37]

6.32       UnitingCare observed that ‘better educating persons to whom powers are granted should be a fundamental step towards the prevention of abuse’.[38] The ALRC considers that better understanding is a necessary safeguard against abuse, and proposes that newly‑appointed guardians and financial administrators be better informed about the scope of their appointments, the limits of their powers and their obligations under statute. Greater education would complement the requirement for an undertaking in Proposal 6-2.

6.33       The ALRC is interested to hear about the best way to provide such education, and invites submissions on whether training should be compulsory, at the discretion of the tribunal or incorporated into tribunal processes.

Question 6–1              Should information for newly-appointed guardians and financial administrators be provided in the form of:

(a)      compulsory training;

(b)     training ordered at the discretion of the tribunal;

(c)      information given by the tribunal to satisfy itself that the person has the competency required for the appointment; or

(d)     other ways?


6.34       Stakeholders strongly supported training all newly-appointed private guardians and financial administrators about their roles, obligations and responsibilities.[39] Training was said to have a two-pronged effect. First, training may help inform those decision makers who are unaware of their obligations.[40] For the small number of people who deliberately set out to exploit or abuse a person, training would reinforce the seriousness of their role and the consequences of any breach.[41]

6.35       The Townsville Community Legal Service suggested a ‘school’ for attorneys/administrators and guardians—perhaps in the form of an online training forum uniquely adapted to the issues of each jurisdiction and appointment.[42] The Office of the Public Advocate (Vic) suggested that education and training for private guardians and administrators could be provided in Victoria by the Office of the Public Advocate and State Trustees.[43]

6.36       A program of mandatory training for guardians and financial administrators may not be a practical solution. There may be issues of access for people who live in regional areas and for people from culturally and linguistically diverse backgrounds. The ALRC has been advised in consultation that there is little efficacy in forcing people to undergo training. Where training has been provided and attendance has been voluntary, the ALRC has heard that only the people already informed and not in need of training attended.


6.37       In its Guardianship Report, the Victorian Law Reform Commission (VLRC)recommended that the tribunal be able to appoint a guardian or financial administrator, subject to the condition that the person undertakes a designated training program, with state trustees and the public guardians appropriately funded to undertake the training.[44] This recommendation aimed to ‘promote understanding of the responsibilities and duties of substitute decision makers’,[45] and focused on educating only people that the tribunal identified to be in need of further training.

Tribunal processes

6.38       Education could be incorporated into tribunal processes without the need for external training.

6.39       Generally, the tribunal must be satisfied of a person’s suitability, competency or ability to act in the appointment.[46] It has been suggested that, as part of that requirement, the tribunal could seek confirmation that the person understands the scope of the role and their obligations under statute. Where the tribunal is not satisfied that the person has the requisite knowledge, it could be incumbent on the tribunal to outline the key obligations and responsibilities of the person’s appointment, if it does not already.

Acknowledging obligations

Proposal 6–2              Newly-appointed guardians and financial administrators should be required to sign an undertaking to comply with their responsibilities and obligations.

6.40       Case studies supplied to the ALRC indicate that the seriousness of guardian or financial administrator appointments can go unrecognised.[47] This may be likely where a care arrangement had been in place prior to the order and the guardian or administrator continues the informal, often familial, arrangement.

6.41       The VLRC recommended that all ‘tribunal-appointed substitute decision makers’ undertake in writing to act in accordance with their responsibilities and duties.[48] The ALRC agrees that an undertaking should be signed following an appointment of all tribunal‑appointed guardians and financial administrators (including those acting for state bodies of last resort). The proposed undertaking would serve to solemnise the appointment and reinforce the obligations of the guardian or administrator. It may also be available for use in any subsequent proceedings concerning failure of a decision maker to comply with their obligations.[49]

6.42       This small act could have a large impact on the mindset of people undertaking these appointments. 

Providing security

Question 6–2              In what circumstances, if any, should financial administrators be required to purchase surety bonds?

6.43       In Chapter 5, the ALRC proposes to vest tribunals with compensatory powers. This aims to deter people from acting outside of their power, while also providing an avenue for redress when that occurs. State Trustees Victoria, however, observed that

[o]ne of the more distressing features of State Trustees’ investigations into allegations of financial abuse is that often, by the time the issue has been identified, an application made to VCAT, and an administrator appointed, the offender has squandered what was misappropriated and there are no assets to recover.[50]

6.44       The ALRC asks whether the surety bond scheme of the NSWT&G should be adopted nationally, to address situations where compensation orders cannot restore the person to their original state because misused funds have been totally depleted.

6.45       Statutes in NSW and Queensland permit the public trustee to require that security be lodged with state trustees.[51] NSW introduced a surety bond scheme in March 2015. Under the relevant provision, all private financial managers are required to obtain a surety bond over the managed person’s estate.[52] The cost of the bond depends on the value of the estate. An estate valued at under $25,000 attracts a one-off fee of $150. Estates valued from $25,001 to $50,000 attract a one-off fee of $350. Where assets of the estate are worth over $50,001, an ongoing annual fee is charged at 0.04% of the value of the estate.[53]

6.46     NSWT&G explained that the bond system was introduced because of the limited protections in place for people whose affairs are managed by a financial manager:

The current process of civil action to recover losses is long and costly, and may not result in the full recovery of funds. NSW Trustee & Guardian introduced the Surety Bond Scheme to make sure that all privately managed estates are adequately protected.

Cases of mismanagement and fraud are rare, but they do occur. The Surety Bond scheme protects against mismanagement and fraud and can also be applied in circumstances where managers suffer ill-health, or develop dementia and make decisions that lead to material loss.[54]

6.47       The NSW scheme is in its infancy, and there is no available evaluative material. The Public Trustee of Queensland suggested that consideration be given to implementing the surety bond program nationwide.[55] The ALRC is interested in hearing whether this program would be useful in other states and territories. Some considerations include:

  • How would this scheme interact with the proposal to extend the jurisdiction of tribunals to make compensation orders (see Proposal 5-5)? In Queensland, for example, the Guardianship and Administration Act 2000 (Qld) makes provision for the security to be applied in satisfaction of the order for compensation.[56]

  • Are there any unintended consequences attached to the scheme? For example:

  • would it act as a deterrent for potential financial administrators to accept the appointment; and

  • would an administrator be more inclined to take funds and assets where the administrator considers that the funds would be recuperated by the person subject to orders?

Ascertaining will and preferences

Question 6–3              What is the best way to ensure that a person who is subject to a guardianship or financial administration application is included in this process?

6.48       Tribunal processes safeguard against guardianship or financial administration orders being made against persons where they are unaware of the application. Tribunals endeavour to make sure that a person is aware when an application is made for guardianship or financial administration against them. Tribunals generally advise the person when an application for guardianship or financial management has been made by providing copies of the application to the person’s address. Some states will provide persons who are the subject of an urgent hearing with a verbal notice of hearing.[57]

6.49       Tribunals are generally required by statute to consider the views of the person prior to making an order.[58] All tribunals encourage attendance of the person at the hearing, where attendance is possible. Where required, interpreters or other communication aids may be provided to aid the person’s participation.

6.50       There does not, however, appear to be any requirement for tribunals to speak directly with a person who cannot attend the hearing. The ALRC is concerned that this may amount to the will and preferences of an absent person not being obtained by the tribunal. Particularly, it may be difficult for the tribunal to accurately ascertain the need for guardianship and financial administration, and the scope of any order without first speaking with the person.

6.51       It is the preliminary view of the ALRC that a best-practice model should require the tribunal, where possible, to speak with the person regardless of attendance at the hearing before the tribunal appoints a guardian or financial administrator. The ALRC welcomes submissions on the processes of tribunals in this regard.