The identity crisis plaguing our elderly

I’m referring to the fact the ecosystem, as it has developed, has separated itself from our seniors, in fact the system fails to see them or to put it directly, it cannot identify them.

We have an identity crisis.

It’s a part of life that as we enter our later years (which when considering what age, to put here really does vary) our ability to move about decreases. The trips overseas with a backpack get replaced by rolling suitcases aboard cruise lines, only to become road trips with the grandkids to visit family in other states. Our day-to-day mobility changes from just hopping down to the shops in the car to catching the bus or scootering down the street for a few things, to being picked up by a support worker or family member for our weekly shop; and in these changes, less people need to know who we are. We hand over our license, we let our passport expire, and we live comfortably and simply.

This is where the problem begins.

As a financial adviser that does a lot of work with residential aged care clients, or in most cases their powers of attorney, an individual’s lack of identification plagues their later years, causing a lot of stress for the family, and the individual. This op-ed is just me venting frustrations I’ve been harbouring for some time, at how we are leaving our seniors behind.

100 points

The Australian government adopted the 100-point check as a personal identification system to combat financial transaction fraud by individuals and companies.

This system, which most adults will be familiar with, requires you to hit “100 points” of ID, with different forms having different points. If you have a state-issued driver’s license (40 points) and a passport (70 points), you’re sorted. Those documents also have an expiry, so although you are the same person once that date passes, they just become bits of plastic. For those of us that drive and travel, this is easy; and we can all understand why it’s important for an institution who is managing any amount of our money to ensure we are who we say we are, especially in the current environment of fraud and scams.

But what about your nanna? She has neither of those documents. In fact, she has lived in the same house in the suburbs so long, she couldn’t tell you where her birth certificate is. She does have a Medicare card and her Centrelink Pensioners card because she uses those regularly, and maybe with a utility bill and a tax return she might get 100 points, but she still lacks a “primary document”.

This issue is further amplified when nanna loses the cognitive and physical ability to act on her own behalf.

Beforehand, Nanna probably had a process: she’d go to the bank once a week to pay her bills and the staff all know her there (which is great until banks close all their branches) and it’s likely she hasn’t updated Centrelink in years, but she is under the assets test so it’s not a big deal. In a world where everything is done via a 2FA protected online portal, she can still participate.

When the family needs to take over however, usually in a moment of high tension and stress as nannas had a fall and needs to enter care, the bar to prove identity alongside the ability to act on behalf of nanna is sky high.

This is of absolute crucial importance, as everyone knows of at least one circumstance of elder and financial abuse in care or family relationship. It does, however, become an enormous burden on those powers of attorney who are trying to do the right thing.

Here are a few examples of financial institutions requirements for the power of attorney to act, that I’ve dealt with, just in the past few weeks.

One trading account provider required the account holder to sign a form to appoint their power of attorney. The account holder in question had dementia. The power of attorney was not able to sign this form, as they would be signing to appoint themselves. We went around in circles. The staff I spoke with knew this was wrong, but there was no process around it.

One investment account provider required their own version of an ID system (different but similar from the 100 points). The account holder had entered care for physical challenges and still had capacity. She did not, however, have a driver’s license or photo ID that matched her address (being that she was in care), nor a passport. She needed to sell the investments to fund her aged care costs. Being in her 90s, she had never used a computer, had no email and avoided the mobile phone. The provider had no ability for her to provide verbal or written consent to issue the sell-down herself or to appoint a power of attorney or appoint an adviser to act on her behalf, without meeting their ID requirements for the account holder. Each day this dragged on, she paid 8.17 per cent interest on her unpaid RAD.

The account holder had recently entered care, and in the clean-up of the house the family found documentation for an annuity no one knew about. As part of this process, we need to know whether or this account still exists. In order to do so, we needed to meet specific ID requirements (again, not the standard “100points”), all ID certified within the last 90 days, alongside power of attorney documentation. This license expired within the last 12 months.

Each of these instances in isolation doesn’t seem that bad, especially if you outsource it to a financial planner. Imagine however, that you are the power of attorney for your nanna, and you had to do all three of these, on top of phone, utility and other product providers, each with their own requirements.

You may be thinking, “Nathan this is not just a finance industry problem, this sounds systemic of our modern world.” And you’d be right, but the finance industry “hook” was stronger than pointing out our modern world is hard for our vulnerable elderly.

So, what can we do?

The first answer is if your family or friends are starting to get older, encourage them to get a state-based proof of ID card.

These vary from state to state, but to obtain them, their requirements are quite robust, and as with the examples above, in instances where the person who needs ID cannot leave a facility due to illness, to obtain it themselves, or they lack the necessary documentation (like knowing the location of their birth certificates), this can be an unclimbable barrier. Not all institutions recognise this as a form of ID either, especially where the address doesn’t match their current living circumstances.

Accompanying that, keep good records. Everyone should have an important documents folder or vault to make it easy (including ourselves) to find what they need. Encourage your family (and for the advisers who read this, your clients) to do the same.

I’ve mentioned this multiple times too, but power of attorney documentation is arguably more important than a will for nanna. The absence of a will delays things and can cause infighting, sure – but without adequately documented powers of attorney, the process to gain the ability to act, and then the record keeping required once appointed by a court is a nightmare.

None of these ideas solves the issue I’ve raised, but they do lessen the impact.

Someone smarter than me likely has a better solution, however, I’d love to see a senior’s card that also doubles as photo ID. We could be seen as a celebration of age, or a milestone to finally receive! I would hope that from an implementation perspective, between Tax File Numbers, Centrelink Reference numbers, passport and driver’s license numbers, this should be something relatively easy (relatively) to execute earlier in someone’s retirement; ID that they can keep and renew throughout their later years, maybe sent to them on their 70th birthday, with a note from the PM?

I think it’s too much to ask that we have some form of ID database that makes identifying yourself (and doing things such as changing your name, a hassle for those who have done it) much easier, but I can’t begin to imagine the broader issues that may arise from that kind of system.

In the same light, I am reluctant to propose a standardised ID system, as with stricter top-down rules it may limit the institutions to solve the issues I mentioned earlier.

In closing

Our modern world gets easier and easier for those that are just young enough to follow along, but in the name of efficiency and constant growth, we can leave behind those that were once seen as pillars of experience and community and not even be able to identify them anymore. Like so much in the modern world, this is a problem that will only be solved if those who aren’t impacted, make enough noise for those that are.