WHY ELDER FINANCIAL ABUSE OCCURS
Intentional financial abuse of older people in the community is evident but sometimes the abuse is unintentional. The perpetrator may be completely unaware that the actions they are taking constitutes abuse. Abuse may result from intentions that were originally altruistic. Abuse may also, on the other hand, involve criminal intent.
A number of factors may contribute to the manifestation of intentional and unintentional financial abuse.
Ageism in the community
News stories of an ageing population, often coupled with claims of generational selfishness ("spending the kids inheritance"), talk of the increased burden on the taxpayer, warnings of the expected "burden" on the health system all contribute to an atmosphere of generational resentment. The current generation is the first generation of older people to be considered a "social problem".
Ageism manifests itself in stereotyping and discrimination. Older people are discredited and disregarded. Their needs and rights are seen as subordinate to those of the following generations.
Independent retirements and changing social norms
Past generations expected that their family, in particular their children, would take care of them in their old age. There was the accompanying expectation that family wealth would be passed down from generation to generation.
For much of the twentieth century there was also the expectation that the state could be relied upon for support of older people, through the provision of aged pensions, free or subsidised healthcare, and institutional accommodation.More recently, Australia has moved towards a user pays system of aged-care, where better care can be accessed for those who are willing to pay more. People now expect to contribute more towards their retired lifestyle and care in later life, and so are making financial provision for their support in their old age. Most Australians remain in their own home, multiple generations are less likely to live together, older people expect to be, and are expected to be, more financially independent.
Older people are increasingly planning to use their assets to fund their old age. They are now obliged to provide for themselves first, before even thinking about intergenerational obligations.
A sense of entitlement
The theme of entitlement comes up time and again in instances of financial abuse of older people by members of the family, and others. In the interviews conducted as part of the Protecting Elders' Assets Study (PDF) by Monash University, observations of the children of clients demonstrating ownership and entitlement towards the assets of the parents were common. The expectation that they would inherit their parent’s wealth was both motivation and justification for interfering with the financial affairs of their parents. This sense of entitlement can lead to bitter disputes within families and competition to be "the closest" to their parents.
Financial abuse by children of the abused with a high sense of entitlement to their parent's assets can include borrowing money, but not paying it back, asset stripping and denying them care they need and can afford, to preserve their inheritance.
Temptation of opportunity
Financial abuse is the only form of elder abuse which can take place in isolation from the abused. The advent of electronic transactions has meant that opportunities for misappropriation of funds and other assets have increased, just as the opportunities for supervision have decreased. Transactions and correspondence are now often carried out via the internet, or by email. In an age when funds are typically accessed electronically, theft of a PIN can lead to unfettered access to funds and the temptation to access them dishonestly can be strong.
Older people can make poor decisions and this may be in part due to impaired decision making. Older people can lose the ability to manage their finances. Sometimes family members may step in, with the honest intention to act on behalf of the older person. Sometimes this can gradually change, from taking care to taking the assets. This abuse, unintended at the outset, can take a number of forms, including:
- separation from assets, for example, selling the older person's house, usually in return for promises of care
- obtaining an Enduring Power of Attorney when a person shows signs of deteriorating capacity, without proof of capacity
- decisions taken at a time of crisis, when the older person was vulnerable and accountability was poor
- due to cultural norms, intergenerational relationships take priority over accountable asset management
- where children use love for themselves and grandchildren as a lever to get access to the older parent's assets.
Intentional financial abuse is financial abuse that is carried out by a person in a position of trust with the clear intention of benefiting the perpetrator at the expense of the owner of those assets. It can range from deliberately defrauding someone, a criminal activity, to deciding to deny needed health care simply to preserve an expected inheritance. The Monash University study found that there is a greater exposure to intentional abuse when the older person is isolated, unprotected and failing in cognitive capacity. It may involve coercion through love or fear or confusion and is undeniably wrong.
Intentional financial abuse may involve professionals who abuse their relationship, or impatient children with a high sense of entitlement to their expected inheritance, or friends who have managed to take pre-eminence over family relationships. The abuser demonstrates the willingness to interfere in the management of the assets in their own interests, even to the detriment of the owner of the assets.