Chapter 7 - Protecting older people's rights and interests

Key Messages

The Positive Ageing Strategy has raised the profile of older people and has highlighted the importance of recognising their rights and interests in policy development.
Most older people have the same capacity to pursue and protect their personal rights and interests as younger adults.
As people age their physical capacities may decrease and the likelihood of an age related degenerative condition increases. Very old age compounds these risks.
Diminished physical or mental capacity carries risks and vulnerabilities, that need to be recognised and accounted for in social services policy and legislative provisions.

Introduction

Older people, like all citizens, have their rights protected through the generic protective legislation such as the Human Rights Act 1993 and its amendments, and the Protection of Personal and Property Rights Act 1988, and through specific health, social security and consumer law. Similarly, older peoples interests and needs, which are various, are not fundamentally different from those of the wider population. Further, most older people have the same knowledge of, and capacity to protect, their personal rights and interests as younger adults.

There are some experiences, conditions, and vulnerabilities that are more common among, or specific to, older people. For instance, very old people or older people with diminished mental or physical capacity require other people to meet their care and support needs. While in most such instances these needs are well addressed, abuse and neglect of vulnerable older people is not uncommon. Age Concern New Zealand reports that abuse or neglect is experienced by 4-5% of the older population.

Another situation in which older people are at risk of their rights and interests being ignored or denied is where another person has been granted the legal right to make decisions on their behalf. There have been many instances where this legal right, exercised as a power of attorney, has been misused.

A further area of relevance to the rights and interests of older people is in retirement, if a decision is made to live in a retirement village. More than 21,000 older people currently live in retirement villages, most of whom reside under a licence to occupy arrangement that does not bestow the legal, financial or residency rights of either tenancy or ownership. The financial complexities of the purchase of a licence to occupy arrangement, the fee and services regime that operates within a village, and the way this is presented to intending residents, can expose some older people to unanticipated costs or complicated, misunderstood or harsh financial terms and conditions.

The potential financial vulnerability of retirement village residents, misuse of enduring powers of attorney, and elder abuse and neglect have all been recognised as issues which need to be specifically addressed in legislative provisions or social services policy.

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Retirement villages legislation

Living in a retirement village is an attractive option for a growing number of older people. It offers security, companionship and access to the services they consider important. A Retirement Villages Association survey in 2000 identified 303 retirement villages in New Zealand, a 13% increase since the previous survey two years earlier. It is estimated that there are 21,000 people over the age of 65 living in retirement villages. This is 4.66% of the over-65 population.

Retirement villages are diverse in target age-groups and facilities. Some villages are large complexes with elaborate facilities while others consist of a few residential units on their own. That diversity is reflected in funding arrangements with costs of residence and services being paid on entry, as a monthly charge, on exit, or a combination of two or more of these options.

While many older people enter a retirement village believing they are purchasing a unit, this is not the case. Approximately 65% are secured by a licence to occupy and even the villages that offer title, do so with an encumbrance on the title or condition of sale that vests control of sale to the village operator.

In the absence of more appropriate protections, buying into a retirement village has been considered to be a contributory financial or security investment and, as such, subject to the Securities Act 1978. The provisions of the Securities Act, with its focus on disclosure at the time an investment is made, does not adequately address the risks that people face when buying what amount to habitation rights to a residential unit in a village. There is also legal uncertainty as to whether or not the Securities Act applies to a number of the different village title structures currently available in the marketplace.

So while retirement villages are an accommodation option that is attractive to many older people, it is an option that carries significant financial and occupational risks for them. These risks are often not well understood.

One government action associated with the housing goal of the Positive Ageing Strategy was to Strengthen legal protection for retirement village residents. Legislation specific to protecting the interests of retirement village residents was developed and introduced to Parliament in December 2001.

The main measures in the Bill are:

all villages are covered through the application of an inclusive definition;
a requirement for a comprehensive Disclosure Statement in a standard format that ensures all prospective residents are fully aware of terms and conditions;
cooling-off period of 10 working days during which prospective residents can rescind their decision to buy into a village;
a Code of Residents Rights that spells out the rights and responsibilities of both residents and owners/operators, and a robust disputes resolution process;
every village will be required to engage a Statutory Supervisor to represent the collective interests of the residents;
every village will be required to register with the Companies Office and provide copies of all the key documentation relating to the village;
a role for the Retirement Commissioner in monitoring the effectiveness of the legislation as well as information collection and education;
development by the industry of an Industry Code of Practice; and
sanctions and penalties if operators fail to comply with the legislation.

The Retirement Villages Bill had its first reading on 26 February 2002. It was referred to the Justice and Electoral Select Committee, which received 80 submissions on the Bill from a range of sector interest groups, retirement village operators, individual residents, village residents associations, statutory supervisors, and interested members of the general public. The Select Committee heard oral submissions on the Bill during May 2002, and, at the time the General Election was announced, had a scheduled report back date of August 2002.

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Retirement villages legislation

Living in a retirement village is an attractive option for a growing number of older people. It offers security, companionship and access to the services they consider important. A Retirement Villages Association survey in 2000 identified 303 retirement villages in New Zealand, a 13% increase since the previous survey two years earlier. It is estimated that there are 21,000 people over the age of 65 living in retirement villages. This is 4.66% of the over-65 population.

Retirement villages are diverse in target age-groups and facilities. Some villages are large complexes with elaborate facilities while others consist of a few residential units on their own. That diversity is reflected in funding arrangements with costs of residence and services being paid on entry, as a monthly charge, on exit, or a combination of two or more of these options.

While many older people enter a retirement village believing they are purchasing a unit, this is not the case. Approximately 65% are secured by a licence to occupy and even the villages that offer title, do so with an encumbrance on the title or condition of sale that vests control of sale to the village operator.

In the absence of more appropriate protections, buying into a retirement village has been considered to be a contributory financial or security investment and, as such, subject to the Securities Act 1978. The provisions of the Securities Act, with its focus on disclosure at the time an investment is made, does not adequately address the risks that people face when buying what amount to habitation rights to a residential unit in a village. There is also legal uncertainty as to whether or not the Securities Act applies to a number of the different village title structures currently available in the marketplace.

So while retirement villages are an accommodation option that is attractive to many older people, it is an option that carries significant financial and occupational risks for them. These risks are often not well understood.

One government action associated with the housing goal of the Positive Ageing Strategy was to Strengthen legal protection for retirement village residents. Legislation specific to protecting the interests of retirement village residents was developed and introduced to Parliament in December 2001.

The main measures in the Bill are:

all villages are covered through the application of an inclusive definition;
a requirement for a comprehensive Disclosure Statement in a standard format that ensures all prospective residents are fully aware of terms and conditions;
cooling-off period of 10 working days during which prospective residents can rescind their decision to buy into a village;
a Code of Residents Rights that spells out the rights and responsibilities of both residents and owners/operators, and a robust disputes resolution process;
every village will be required to engage a Statutory Supervisor to represent the collective interests of the residents;
every village will be required to register with the Companies Office and provide copies of all the key documentation relating to the village;
a role for the Retirement Commissioner in monitoring the effectiveness of the legislation as well as information collection and education;
development by the industry of an Industry Code of Practice; and
sanctions and penalties if operators fail to comply with the legislation.

The Retirement Villages Bill had its first reading on 26 February 2002. It was referred to the Justice and Electoral Select Committee, which received 80 submissions on the Bill from a range of sector interest groups, retirement village operators, individual residents, village residents associations, statutory supervisors, and interested members of the general public. The Select Committee heard oral submissions on the Bill during May 2002, and, at the time the General Election was announced, had a scheduled report back date of August 2002.

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Misuse of enduring powers of attorney

It is possible, and often prudent, for people, while they have the capacity to do so, to grant authority to another person to exercise powers over their financial and, in some cases, personal affairs. This authority is known as a power of attorney.

The person giving the power of attorney is called the donor and the person authorised to act is known as the attorney. It is not necessary for the attorney to be a lawyer. A power of attorney can give powers that are unlimited, it can be of fixed or limited duration, and can be revoked by the donor at any time.

A power of attorney is simply a formal type of agency under which the donor appoints the attorney as an agent to do certain things that the donor has the legal right to do. Until the late 1980s this type of arrangement posed real difficulties. The problem was that once the donor ceased to possess the capacity to perform the delegated tasks, the attorneys powers to do those tasks also came to an end. If the attorney continued to act as if he or she had those powers they ran the risk, if there was a dispute, of the attorneys actions being declared void or the attorney being liable for any losses resulting from their actions.

The solution to this problem was to provide, through legislation, a type of power of attorney that could continue in effect despite the donors subsequent incapacity. Part IX of the Protection of Personal and Property Rights Act 1988 (the PPPR Act), provides the legal machinery for such enduring powers of attorney, and allows decisions to be made by attorneys on behalf of those unable to manage their own financial affairs or make appropriate personal decisions and choices.

In May 2000, the Law Commission published a discussion paper on the misuse of enduring powers of attorney (EPAs). The paper discussed the absence of adequate safeguards for the protection of donors of EPAs under Part IX of the Protection of Personal and Property Rights Act 1988. After considering the submissions, the Law Commission, on 27 March 2001, submitted Report 71 Misuse of Enduring Powers of Attorney, which examined the adequacy of protection for donors of EPAs.

The Law Commissions report identified five categories of misuse of EPAs:

Abuses in relation to the initial granting of the EPA; particular problems arise where the execution of an EPA is left until after the effects of senility have begun to become apparent, or where the donor is pressured by undue influence or coerced into creating an EPA, or creating it in favour of a specific attorney.
Neglect of the donor by the attorney; anecdotal evidence suggests that some attorneys neglect their donors interests so as to preserve the value of property or cash assets, from which the attorney will later benefit.
embezzlement and theft of the donors money; currently, there is a power under the PPPR Act for an attorney to benefit themselves or others, to the extent that the donor might be expected to provide for the needs of the attorney or others. Subject to certain conditions, an attorney may also dispose of a donors property by way of gifts.
Bullying and lack of consultation with the donor.
Problems with the mental incapacity test, which is used to assess donors capacity to make or communicate decisions.

The Law Commission recommended amendment to Part IX of the PPPR Act as the means to curb the misuse of EPAs and provide additional safeguards for donors.

Age Concern, trustee companies, and law firms are promoting EPAs as a way in which older people can protect their financial and personal interests in advance of any loss of functional capacity. Such moves are to be applauded. However, addressing the misuse of EPAs is important to protecting the integrity of these measures. It is also important in reducing the incidence of elder abuse and neglect.

Work to review and revise legal provisions relating to the misuse of enduring powers of attorney is important for achieving the vision of the Positive Ageing Strategy. Part of that vision is that Older people are able to live in a safe and secure environment and receive the necessary support when they can no longer live independently.

The Ministry of Justice is currently considering the recommendations in the Law Commissions report. The Office for Senior Citizens has provided policy advice to the associate Minister of Justice on this issue. With the assistance of the Volunteer Community Co-ordinators network, the Office has also provided feedback to the Ministry of Justice on these recommendations.

Elder abuse and neglect prevention

Elder abuse and neglect is any act occurring within a relationship where there is an existing degree of trust on the part of an older person which results in harm to that older person.

Categories of elder abuse may be identified as:[1]

physical abuse infliction of physical pain, injury or force;
psychological abuse behaviour that causes mental or emotional anguish or fear;
sexual abuse sexually abusive and exploitative behaviours involving threats, force, or the inability of a person to give consent;
material/financial abuse the illegal or improper exploitation and/or use of funds or other resources;
active neglect conscious and intentional deprivation by a carer of basic necessities resulting in harmful effects; and
passive neglect refusal or failure by a carer, because of inadequate knowledge, infirmity or disputing the value of the prescribed service, to provide basic necessities resulting in harmful effects.

Data collected from elder abuse and neglect prevention services show that most incidents of elder abuse usually involve more than one type of abuse and that most abusers are family members.[2] The effects on the victim, his/her carer, family and society are far-reaching and can result in the need for expensive health and other social services.[3]

Preventing and reducing the incidence of elder abuse and neglect therefore has significant benefits not only for the older person concerned, but also for government.

Most research estimates that between 2-5% of the older population experience some form of elder abuse or neglect. In New Zealand this means that based on 2001 Census figures, there may be between 9,000 (2%) and 22,500 (5%) older persons experiencing elder abuse or neglect. In the six months to 30 June 2001, elder abuse and neglect prevention services in New Zealand received around 1500 general enquiries, ran more than 400 community education and awareness programmes, and referred over 620 clients for assessment. Of the clients referred for assessment, almost 400 were found to be cases of elder abuse or neglect.[4]

There are currently 22 elder abuse and neglect prevention services around New Zealand:

Branches of Age Concern New Zealand deliver the services in Whangarei, North Shore, Auckland, Manukau, Waikato, Tairawhiti, Hawkes Bay, Wanganui, Manawatu, Kapiti, Wellington, Nelson, Christchurch, and Invercargill.
Presbyterian Support Services provides the services in Tauranga, Wairarapa, South Canterbury and Dunedin.
Tui Ora Ltd provides the service in Taranaki, and Buller REAP in the West Coast/Buller region.
The remaining two services are provided by Huakina Development Trust in Auckland specifically for Māori, and by TOA Pacific/ Methodist Mission in South Auckland specifically for Pacific peoples.

All elder abuse and neglect prevention contracts require the provision of the same range of services. It is important to note that the providers of elder abuse neglect prevention services have a referral and co-ordination role, rather than providing professional, assessment or advisory services. The contracts for elder abuse and neglect prevention include the following components:

initial assessment of reported incidents of elder abuse and neglect;
co-ordination of, and referral to, professional services;
support or arranging support to victims and, where appropriate, their family and carers;
identification and/or establishment of emergency safe beds;
monitoring and reviewing individual cases;
provision of education to a range of professionals about elder abuse and neglect prevention, detection, intervention and treatment;
raising of community awareness of elder abuse and neglect;
and provision of statistical data on the services provided.

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There is no statutory requirement to report elder abuse or neglect.

International research indicates that mandatory reporting is not usually in the best interests of older people, because it generally results in removing an older person from their usual living situation.

Most older people do not wish to be moved from their place of residence, even if it is where abuse or neglect has occurred. Research suggests that moving an older person is invariably harmful to their physical and emotional wellbeing, and that support and abuse prevention within their home is usually the most appropriate response.

Responsibility for funding elder abuse and neglect prevention services lies with the Minister of Social Services and Employment, and the Department of Child, Youth and Family Services (Child, Youth and Family) is responsible for managing the contracts with service providers. In total, Child, Youth and Family currently purchase elder abuse and neglect prevention services to the value of $842,000 a year.

The Office for Senior Citizens (then the Senior Citizens Unit) was influential in acquiring funding for the Age Concern programme from Lottery Aged from 1993 and in establishing ongoing government funding for the programme in 1998. The Office had been involved since 1990 in the development and monitoring of the elder abuse and neglect prevention programmes. It is the principal advisor to Child, Youth and Family on issues relating to elder abuse and neglect prevention.

Funding is evenly distributed across all services and differences in workloads are not recognised in the funding formula. Since 1998 the amount of funding per service has not increased, but neither has there been an increase in contractual requirements. Nevertheless, the difference between funding and the actual cost of services being provided has incrementally increased with the service providers covering this increase themselves.

This is due both to increased demand for services, which has been reported anecdotally by service providers, and providers shouldering responsibilities greater than those they are contracted for, in order to maintain quality services.

Simply on a demand for service basis, it is evident that expanded or additional elder abuse and neglect prevention services are needed. There are also indications that additional or expanded services are required to address gaps in the geographical coverage of services.

Expanding the elder abuse and neglect prevention programme would also contribute to the achievement of the goals of current government strategies for positive ageing and family violence.

In the Positive Ageing Action Plan 2001/02 the elder abuse and neglect prevention programme is linked to Positive Ageing Principles 5, 6, and 8. These are:

Principle 5: Affirm the values and strengthen the capabilities of older Māori and their whānau.
Principle 6: Recognise the diversity and strengthen the capabilities of older Pacific peopl.
Principle 8: Recognise the different issues facing men and women.

The programme also contributes to achievement of Goal 5 of the Strategy, Older people feel safe and secure and can age in place.

Extension of the elder abuse and neglect prevention programme, whether through expansion of existing services or establishment of new services, would also fit well with the vision and goals of Te Rito, the New Zealand Family Violence Strategy.

This strategy, released in February 2002, covers the prevention of all forms of family violence, including intra-family elder abuse and neglect.

Service provider information indicates that more funding is needed for elder abuse and neglect prevention services. It is also makes sense from a preliminary cost/benefit analysis perspective. Money spent effectively preventing abuse and neglect among older people is money not spent on the relatively more expensive professional services that are needed to deal with an abused or neglected person. A bid for more funding would be considerably strengthened if it were submitted with both an evaluation ofof the effectiveness of existing services, and a rigorous cost/benefit analysis.

Endnotes

1. Age Concern New Zealand. Promoting the Rights and Well-being of Older People and Those who Care for Them. September 1992.

2. Business and Economic Research Limited. Report of Evaluation of Elder Abuse and Neglect Programmes. January 1998.

3. Ibid.

4. Figures supplied by Child, Youth and Family.

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