Legal Update: Powers of Attorney Act passed

2 Aug 2014

The new Powers of Attorney Act 2014 consolidates legislative provisions for powers of attorney and embraces supportive decision making.

On 26 August 2014 the Powers of Attorney Act 2014 received royal assent and is expected to commence on or before 1 September 2015. It consolidates legislative provisions for powers of attorney, which currently fall within the Instruments Act 1958, and enduring powers of guardianship, currently covered by the Guardianship and Administration Act 1986. It comprehensively covers the scope, making and revocation of:

  • non-enduring powers of attorney
  • powers of attorney for security
  • enduring powers of attorney for personal or financial matters
  • supportive attorney appointments

It does not cover the appointment of an agent for the purposes of making medical treatment decisions. This remains covered by section 5A of the Medical Treatment Act 1988. It does, however, provide that revocation of such an appointment will occur in the same way that any non-enduring power of attorney would be revoked under the new Act.

While much of the new Act is a consolidation of existing legislation, the inclusion of ‘supportive attorney’ appointments is a new development. Recognising that some people require support in making decisions, the new Act allows a person to appoint a ‘supportive attorney’ who can assist their decision making, by accessing or obtaining information, communicating information or a supported decision, or giving effect to supported decisions. The ‘supportive attorney’ is not a substitute decision maker – they would not make decisions on behalf of the person they are supporting – and they cannot be a care worker, health provider or accommodation provider for the person.

The new Act also details more robust enforcement mechanisms, which Seniors Law have advocated for:

  • Creating new offences where an attorney dishonestly obtains, revokes or uses a power of attorney to gain a financial advantage for themselves or cause a loss to the principal.
  • Expanding VCAT’s powers, especially the new power to order compensation.

However, Justice Connect Seniors Law does not support the pre-determination of the view of the attorney for personal matters – currently a ‘guardian’ – prevailing over the attorney for financial matters if there is a disagreement. This matter should be resolved at VCAT.

Justice Connect Seniors Law will also continue to advocate for a mandatory, free, online registration system for all enduring power appointments coupled with random audits. We believe this could lead to a reduction in the incidence of elder abuse, as registration would prevent people from purporting to rely on powers that have subsequently been revoked and the prospect of being audited would assist to ensure that attorneys comply with their obligations.

Preceding these legislative changes, Seniors Law coordinated the Seniors Rights Victoria (SRV) submission to the Victorian Parliament Law Reform Committee’s Inquiry into Powers of Attorney and SRV submission to the Victorian Law Reform Commission regarding Guardianship Consultation. These submissions recommended reforms including, streamlining the legislative framework governing powers of attorney and enduring instruments, adopting supported decision making arrangements with appropriate accountability mechanisms and expanding VCAT’s powers to make compensation orders.

Seniors Law relies on stories from its clients to inform its submissions on law reform. The submission on Powers of Attorney detailed the following case study:

Patricia appointed her two daughters in 2003 to be her joint attorneys by way of an EPOA (financial). In 2008, Patricia’s daughters sold her house for $340,000 and claimed that Patricia had given them $150,000 each. There was no formal agreement that Patricia agreed to gift $150,000 to each of her daughters. The daughters claim that Patricia had capacity at the time the alleged gift was made. The daughters now claim that Patricia has dementia and due to her disability can no longer recollect having agreed to gift the money. Patricia claims she never agreed to give her daughters the money and now wants it back. The daughters did not seek advice at the time as to whether they could accept the alleged gift, and simply transferred the money into their respective accounts. 

It is because of clients like Patricia, that Seniors Law broadly welcomes these legislative changes. Hopefully, the changes mean better remedies are available when a person has misused a power of attorney and the introduction of supportive guardian will be a less restrictive option to assist people with reduced decision-making capacity.