Laws governing Powers of Attorney must be strengthened to stop incidents of elder financial abuse.
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This is the message for the St George branch of the Association of Independent Retirees (AIR).
"Action to reduce financial abuse using powers of Attorney should be a priority for government," St George AIR Branch committee member Neil Birdsall said.
"We don't want to alarm people. There haven't been many cases but there has been an increase.
"As baby boomers age and there is money in the till, there are more of these cases coming through so we would like to see the laws governing Powers of Attorney strengthened and made uniform across Australia."
"Powers of Attorney are often signed by older persons to allow a trusted relative or friend to conduct their financial affairs when they are no longer able. The vast majority carry out these duties in a caring and responsible way but there has been an increase in the number of cases of abuse using these powers."
The Association of Independent Retirees (AIR) is a national advocacy organisation representing current and future full and partly self-funded retirees. AIR has branches throughout Australia and also an online membership group.
AIR works to advance and protect the interests of Australians seeking independence in retirement.
AIR has made a submission to the Standing Council of Attorneys General, representing state and federal Attorney Generals, supporting uniform laws throughout Australia for Powers of Attorney.
In its submission AIR strongly supported the Attorneys-General in seeking to address financial elder abuse and achieving greater consistency in laws for financial enduring powers of attorney (EPOAs).
"An EPOA should be in a nationally approved prescribed format. This process should be automatic and quickly legislated as it could be considered to be long overdue," the AIR submission states.
"Apart from revocation by death, AIR agrees that a Principal to an EPOA should be able to revoke that power of attorney at any time if the Principal has decision-making capacity.
"AIR sees online training modules as being a suitable direction to further explore, as way to inform and support Principals, Attorneys and Witnesses.
"The 2022/23 report by the NSW Ageing and Disability Commissioner included a number of concerning statistics such as that 1,421 cases of exploitation through misuse of power of attorney and theft had been identified. AIR believes that this is of great concern but also of even more concern is that we believe that the majority of cases of misuse go unreported.
"As a result of reluctance to report, there is little hard data available on the prevalence of elder financial abuse in Australia. But the World Health Organisation estimates about one in six aged people will be victims. Often these are the frail aged.
"The majority of cases of financial abuse involve improperly using an older person's money or assets - for example refusing to repay a loan or forcing an elder to sign a financial document like a Will or Power of Attorney.
"The biggest identified source of financial elder abuse is via what can be called 'family arrangements'. These are usually informal agreements made within families, often verbally, and involving the transfer of assets between an older person and a family member. They can work in good faith but some can go wrong. For example: the parent sells their house and agrees to use the money to pay off their child's mortgage and will then live rent free with the child in their house.
"The parent lets a family member move their family into their home rent free in exchange for taking care of them as they age.
"The parent gives the child an interest-free loan, or agrees to be a guarantor for their mortgage, or takes out a mortgage on their child's behalf.
"While most families begin these arrangements with seeming good intentions and many work well, problems can arise when circumstances change - for example, a serious illness or a change in relationships.
"AIR recommends that families put their arrangements into a legal contract to plan for all possible future contingencies and protect all parties, including other children who do not benefit and may lose financially.
"Verbal agreements do not have a strong basis in law and, if something goes wrong, it can be an expensive and emotional battle for an older person to get their money back."
Contact for the St George branch of AIR is Pat Hinson on 9554 4113.
