In brief - Changes impact meaning and assessment of decision-making capacity, and the appointment of a guardian or administrator

The Guardianship and Administration Act 2019 (new Act) has recently passed the Victorian state parliament. Below is an outline of the new Act and key changes. 

Why new legislation?

The new Act aims to better protect the right of adults with a disability whose decision-making capacity might be impaired, to make and participate in decisions that affect their lives. 

The new Act expressly states that its provisions and the powers, functions and duties that it creates are to be interpreted in a way to be least restrictive of the represented person's ability to make decisions. 

A represented person is a person over whom a guardianship order or administration order has effect (represented person).

The new Act complements legislation such as the Mental Health Act 2014 (Vic), the Powers of Attorney Act 2014 (Vic), and the Medical Treatment Planning and Decisions Act 2016 (Vic).

What are the important changes to the Guardianship and Administration Act?

The new Act repeals the prior legislation governing this area, being the Guardianship and Administration Act 1986 (old Act). The new Act covers issues such as: 

  • the meaning of decision-making capacity and how it is to be assessed. The change can be summarised as moving from "substituted" decision-making to "supported" decision-making; and 
  • the appointment by Victorian Civil and Administrative Tribunal (VCAT) of a guardian or an administrator for a person with a disability who does not have decision-making capacity, subject to appropriate limitations and safeguards, particularly in relation to decisions about the represented person's estate. 

An administrator is defined in Part 3, Division 6 of the Act as the person to oversee particular financial matters in an administration order (administrator) in respect of a proposed represented person.

Powers and duties of an administrator for an adult with disability 

Under section 30 of the new Act, administrators are appointed by VCAT when, because of the represented person's disability, that person does not have decision-making capacity in relation to a particular financial matter.

Financial matters include any financial or property affairs, and any legal matter. One of the primary functions of an administrator is to be responsible for the general care and management of the represented person's estate.

The emphasis on the decision-making role of the represented person means in this context that the administrator must:

  • always act in the best interests of the represented person
  • when making decisions:
    • encourage and assist the represented person to become capable of managing their estate
    • consult with the represented person, take into account the represented person's wishes and give effect to those wishes, wherever possible
  • avoid any transaction that may present a conflict, or even a perception of a conflict, between the administrator's interests and the interests of the represented person
  • ensure that the represented person's investments, if any, are reviewed periodically, at least once a year, to ensure they continue to be appropriate for the circumstances. 

As it was under the old Act, an administrator can make decisions on behalf of the represented person without the approval of VCAT. 

Approval is generally only needed when there is uncertainty surrounding a major decision to be made. 

Transitional provisions

Orders made under the old Act will continue to remain in force unless revoked or set aside by a court or VCAT. The provisions of the old Act will continue to apply and the powers and duties of guardians or administrators will continue to be dictated by the old Act. 

However, some provisions of the new Act will apply, such as the provisions regarding resolution of disagreements, enforcement orders and offences. 

If an order is required to be reassessed, it will be reassessed under the new Act.

What should individuals and organisations do?

Individuals and organisations that are involved with guardianship and administration matters or represented persons should take the following steps:

  1. Review advice on the feasibility of guardianship and administration orders for individuals with decision-making impairments, particularly in light of the new provision regarding supportive guardianship and administration orders and tailored orders.

  2. Be aware of the new offences under the new Act. Officers should understand their obligations for the actions of the body corporate and their potential liability.

  3. Do not mix finances of a represented person with your own individual or an organisation's finances and carefully record financial transactions.

  4. Family members of people who are showing signs of diminished capacity should consider having an Enduring Power of Attorney put in place - noting the new definition of capacity and more flexible options to assist individuals with diminished capacity. 

This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2024.

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