The Government has been urged to create a new aged care watchdog with legal power to tackle the rising incidence of financial abuse of vulnerable elderly people.
Grey Power and the Aged Care Association are worried by the increasing number of elderly people being ripped off.
The abuse is mainly by adult sons and daughters with authority to manage an aged parent's affairs under the legal tool called an "enduring power of attorney".
The two groups want the Government to establish an aged care commissioner, akin to the Health and Disability Commissioner, with legal powers to investigate complaints of abuse and to ask the Family Court to review how a person has managed an enduring power of attorney.
Age Concern's statistics, which are thought to capture only a fraction of the problem, show the annual number of confirmed cases handled by its elder abuse and neglect prevention services increased from 515 in 2006/7, to 583 in 2010/11.
Over the same period, the proportion of cases in which financial abuse was the main form rose from 27 per cent to 35 per cent.
Grey Power president Roy Reid said the organisation was concerned that people with an enduring power of attorney were abusing their authority by taking or using money from the older person's accounts.
"Quite often, especially in rest home scenarios, they are not even giving them any money for their day-to-day needs," he said.
"It usually comes to light when another family member thinks mum or dad's got some money and they eventually find out they don't."
A discussion paper prepared by Grey Power and the Aged Care Association cites the real case study of 94-year-old "George", who gave his daughter enduring power of attorney and shifted into a rest home.
George's daughter sold his home. The proceeds went into a separate account and were later used for a property investment. She also transferred his superannuation payments into a separate account.
George didn't receive the residential care subsidy at first because his daughter didn't provide full information to Work and Income, so he incurred debts for the care, priced at more than $700 a week.
A debt collector was engaged and a part-payment, of several thousand dollars, was made.
Proceedings were filed in the Family Court and the enduring power of attorney was transferred to George's grandson, who completed the subsidy application. The subsidy was backdated but this still left an earlier unsubsidised period which the family did not pay for.
The case dragged on for 23 months, but once resolved, "George's anxiety visibly diminished".
The discussion paper says the abuse of an enduring power of attorney is a legal grey area.
Seeking redress is slow and expensive, and there is often uncertainty about the outcome.
These problems are "the single biggest argument for a formal advocate such as an aged care commissioner".
Senior Citizens Minister Jo Goodhew said she was considering the issues raised. Changes made in 2007 to the law on enduring powers of attorney were being reviewed. The findings and proposed amendments would be reported to Parliament by September 30 next year.
* The Aged Care Commissioner would have formal powers to:
* Investigate complaints of financial abuse of the vulnerable elderly
* Ask the Family Court to intervene if abuse of legal powers is detected
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