Elder Abuse — powers of attorney and financial institutions

The Australian Law Reform Commission (ALRC) has released a Discussion Paper for its Elder Abuse Inquiry (DP 83). DP83 includes proposals dealing with financial abuse of elderly people including the use of enduring powers of attorney.

Financial abuse is a common type of elder abuse. Financial abuse includes such things as taking an older person’s money or belongings, forcing them to sell their home or hand over assets, moving into their home without permission, and incurring bills which the older person is left to pay.

The Discussion Paper includes 43 proposals for law reform in the area.

Key proposals have been made concerning powers of investigation for public advocates and public guardians, enduring powers of attorney and enduring guardianship; family agreements, banking, aged care and social security, including:

  • An online  national register for enduring documents, and tighter witnessing and reporting requirements
  • Expanding the role of public advocates and public guardians in responding to elder abuse
  • Requiring banks to take reasonable steps to prevent financial abuse
  • Allowing tribunals to hear disputes within families about assets-for-care arrangements—providing a low cost and less formal forum for dispute resolution
  • For aged care, strengthening the compulsory reporting scheme by providing for independent oversight of complaints of abuse, enhancing employment screening processes, and the introduction of an official visitors scheme
  • Support for a national plan with strategies to combat elder abuse beyond legal reforms

The ALRC final report will be presented to the Attorney-General in May 2017.

Enduring Powers of Attorney
In addition to the establishment of a national online register of enduring documents, and court and tribunal orders for the appointment of guardians and financial administrators the proposals include:

  • The making or revocation of an enduring document should not be valid until registered. The making and registering of a subsequent enduring document should automatically revoke the previous document of the same type.
  • The implementation of the national online register should include transitional arrangements to ensure that existing enduring documents can be registered and that unregistered enduring documents remain valid for a prescribed period.
  • State and territory tribunals should be vested with the power to order that enduring attorneys and enduring guardians or court and tribunal appointed guardians and financial administrators pay compensation where the loss was caused by that person’s failure to comply with their obligations under the relevant Act.
  • Laws governing enduring powers of attorney should provide that an attorney must not enter into a transaction where there is, or may be, a conflict between the attorney’s duty to the principal and the interests of the attorney (or a relative, business associate or close friend of the attorney), unless:
    (a) the principal foresaw the particular type of conflict and gave express authorisation in the enduring power of attorney document; or
    (b) a tribunal has authorised the transaction before it is entered into.

The proposals relating to banks include:

  • The Code of Banking Practice should provide that banks will take reasonable steps to prevent the financial abuse of older customers. The Code should give examples of such reasonable steps, including training for staff, using software to identify suspicious transactions and, in appropriate cases, reporting suspected abuse to the relevant authorities.
  • The Code of Banking Practice should increase the witnessing requirements for arrangements that allow people to authorise third parties to access their bank accounts. For example, at least two people should witness the customer sign the form giving authorisation, and customers should sign a declaration stating that they understand the scope of the authority and the additional risk of financial abuse.
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