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FINANCIAL ABUSE

CPA Australia weighs in on aged care abuse

In wake of what has been branded a “shocking tale of neglect” of the elderly, CPA Australia has thrown its weight behind finding a solution to Australia’s increasingly maligned aged care sector.

Megan Breen | March 2020

Following disturbing revelations of abuse of older, vulnerable citizens among Australia’s aged care facilities, in October 2018 the Australian Government – pursuant to the Royal Commissions Act 1902 – announced a Royal Commission into Aged Care Quality and Safety.

A damning interim report, released in October last year by the commission, cited a “sad and shocking system that diminishes Australia as a nation”, and identified a need for fundamental change to aged care across the country.

In response to the interim report, CPA Australia has provided a submission outlining its recommendations for reform to the aged care industry.

CPA Australia’s Advocacy Manager, Michael Davison, says the recommendations are focused on the financial aspects of the industry and incorporate concerns raised by CPA Australia members.

“The interim report does not mince words about the neglect people have experienced,” Davison says. “However, when we talked to members and accountants with experience of the industry, it was all about the complexities of the financial aspects of it, which can be as stressful as the concerns around the level of care to be provided.”

Areas needing urgent attention

CPA Australia identifies three key areas that need urgent reform in its submission: the complexity of the funding model and how to obtain appropriate advice to navigate the rules; the complexity of retirement living arrangements (in particular, contractual arrangements); as well as the financial abuse of elder people and how aged care facilities can more effectively identify and respond to it.

Members advised CPA Australia of the difficulty clients face when deciding how to fund accommodation costs for aged care and the lack of available information.

“Funding, in particular, is very complicated and people often turn to their accountants for advice,” Davison notes. “When we spoke to our members, they identified that if they struggled with understanding it as professionals, then it must be even harder for average Australians.

“By far, the largest financial decision is how to pay accommodation fees. It is very unlikely an average person will currently be able to navigate such decisions without professional advice.”

CPA Australia’s submission recommends more information be made available to support people to make informed decisions. It outlines the myriad choices available, including the location of a facility, services and care provided, whether it is government-subsidised or privately provided, how to fund the cost, and whether to pay upfront or on an ongoing basis. It also highlights the decisions that need to be made regarding ongoing fee payments.

The complexity of contracts is another area of focus in the submission, particularly with regards to retirement living arrangements. Feedback from CPA Australia members indicates that profit over service and support extends to retirement living arrangements, which is likely to have an impact on people’s assets when funding aged care.

It recommends legal contracts be written in plain English, including a key information summary upfront, and a requirement that providers act in the best interest of residents to help them adequately fund their transition to aged care accommodation.

“One example we heard was [from] a member who was not recognised as a legal owner of a retirement unit, which they had shared with their partner for many years because they were not listed on the contract,” Davison reveals. “They would have had to repurchase the unit from the retirement village in order to be able to remain in it.”

Financial abuse of the elderly and how institutions can identify and respond to it is another key area of CPA Australia’s submission.

It includes the example of a CPA Australia member who shared the family’s experience of a sibling stealing from the mother’s savings while she was in an aged care facility. While the sibling is now imprisoned for fraud against his employer, the family’s concerns are related to the provider not bringing attention to mounting accommodation debt and the likelihood of further financial abuse.

“There were warning signs financial abuse was taking place that were not acted on by staff and management,” Davison declares. “The problems were allowed to balloon, and it sounds like quite a common scenario.”

Increase awareness and guidance

CPA Australia identifies some critical warning signs as being the accumulation of significant debts, irregular payment of debts, cancellation of direct debit payments and payments from unusual sources and recommends specific guidance.

“We encourage the commission to recommend the development of a guide specific to the industry to identify and prevent financial abuse,” Davison emphasises.

He says the guide should include advice on identifying abuse, assurances that a provider’s duty of care includes processes to deal with abuses, encouraging more than one member of a family to be a “resident representative” and annual financial statements being sent to all such representatives.

“Our submission encourages the commission to be comprehensive in its recommendations and for the government to give serious consideration to wholesale reform.”

The Royal Commission into Aged Care Quality and Safety’s final report is due to be handed down on Thursday 12 November this year.


View CPA Australia's guidance note on advising on aged care.