Senior woman with white hair sitting at the table and looking at computer

Financial elder abuse is on the rise. Are you vulnerable?

Published: 12 August 2022
  • national
  • 12 August 2022
  • National Seniors Australia

After reading a news story about abuse, a daughter speaks of financial elder abuse, highlighting National Seniors Australia’s ongoing calls for Power of Attorney protections.

Lawyers and financial services say elder abuse, in particular financial abuse, is on the rise and commonly occurs in families where one sibling has Power of Attorney (PoA) over parents and misuses it. A recent media news story has highlighted this issue.

The story involved a widow in her late 60s who lost her house to her son after he misused his PoA and lied to her about the family home cutting off her pension.

Believing her son, the woman agreed to sign over her house to him on the basis she would move in with him and his family.

The arrangement broke down, and the woman ended up living in her car before successfully reversing the transfer.

After reading that sad story, Meg* contacted the team at Connect to share her experience of financial abuse.

At the heart of Meg’s story was a sibling, Vicky*, who had control over their parents’ financial affairs through a PoA. She claims this resulted in inappropriate control of finances and altered Wills, including changing content and backdating signatures of a Will after one parent died.

Meg says despite this, the state guardianship authority chose to allow Vicky PoA over the remaining parent to continue.

Meg says she and her other siblings were cut out of their parents’ Wills and financial matters. Things came to a head at the funeral when Vicky, as PoA, instructed the funeral director not to share the celebrant’s eulogy with Meg and her other siblings.

In her letter to Connect, Meg said, “We are shattered about what happened and have wondered ever since what we ever did to Vicky to encourage her to do what she did. Vicky admitted to me before Mum and Dad became residents at the nursing home that she had no money of her own to buy a house, so it was obvious where she turned.” Parental favouritism, sibling rivalry, and nefarious intentions can all poison families managing parental assets when cognitive capacity changes.

Elder abuse a hidden issue

The exact number and prevalence of elder financial abuse cases are difficult to estimate. According to the Australian Banking Association, this is because it often goes unreported.

A government National Elder Abuse Prevalence Study reported only 30 per cent of older Australians who experienced financial elder abuse sought help or advice.

National Seniors CEO and Head of Research, Professor John McCallum, agrees.

"It's a hidden issue. Through the royal commission, we have picked up on elder abuse in residential care, but in-home care and in families … it's alive and well."

Professor McCallum described financial elder abuse as significant, insidious, and frightening.

"People could lose their house or lose all the resources that they've set up for their later life," he said.

Professor McCallum says part of the problem, is trust, especially when parents often hand over more and more financial control to their children as they get older.

"They don't really have a way of resisting … because they've signed off.

Maybe, [they're] still able intellectually to do it but not emotionally to deal with those issues," Professor McCallum said.

Ending up penniless after trusting family

The lawyer of the woman profiled in the ABC News story says there is nothing wrong with older parents helping their children financially, transferring property or even granting a Power of Attorney.

Everyone involved should have their own legal advice.

The bottom-line advice is

  • Don't simply go to your child's lawyer.

  • Don't rely solely on internet research, and

  • Seek the advice of a lawyer who specialises in the area and can advise you of the risks.

National Seniors supports PoA reform

National Seniors is calling for the tightening of Australia’s Enduring Power of Attorney laws, which are mainly controlled by state governments.

We are continuing to call for the following changes, which were contained in our extensive submission to the inquiry into elder abuse several years ago:

  • The development of national or nationally consistent laws governing elder abuse e.g. Enduring power of attorney.

  • A national registration system to be developed for the power of attorney, guardianship and Advance Care Directives, which enable relevant people, including health professionals, to access these documents.

  • A principal to encourage the appointment of multiple attorneys to ensure greater scrutiny over the financial transactions made by an attorney.

  • A right to compensation or damages arising from the misappropriation of funds by an attorney be included in powers of attorney legislation.

  • A principal to encourage the consideration of placing specific instructions and conditions within the EPoA document.

If you or someone you know needs help:

*Names have been changed in this story to protect participants.