What is decision-making capacity?

Key points

• Understanding what decision-making capacity is important when creating legal documents such as wills in advance care planning
• A person with reduced mental capacity may not be able to understand the outcomes of certain decisions or communicate their needs
• Assessment of a person’s decision-making capacity may be required if concerns are raised about a progressive decline in skills such as language use

When organising legal documents such as wills, a person must have ‘legal capacity.’. This means you need to have the ability to understand what you are agreeing to when making decisions. 

However, if a person’s memory, thinking and social abilities decline, e.g. living with dementia, their decision-making capacity may be affected and could limit their legal options regarding personal matters and healthcare choices.

What is decision-making capacity?

Legal capacity means you can make legal, medical, personal or financial decisions about your life. This could be where you want to live, what health services you receive, what you want to spend your money on or how you want your assets distributed if you die.

A person who has the capacity for decision-making can:

• express their needs and wishes;
• be aware of their options; and
• understand the outcomes of certain decisions.

Dementia can impact your legal capacity as the disease can affect your thinking ability, memory and behaviour. Legally, you may not be permitted to make decisions related to your healthcare or assets.

Legal capacity regulations can differ across states and territories, so it is important to understand the laws in place where you live before you experience a decline in your mental capacity, e.g. dementia.

How can I check someone’s decision-making capacity?

Capacity toolkits are available to help carers and healthcare professionals identify when someone may have a reduced decision-making capacity. Although the guidelines may differ slightly between Australian states and territories, New South Wales Health has created an informative capacity toolkit in collaboration with the Department of Health Tasmania.

While you can use these toolkits to understand more about capacity and decision-making, it’s important to know that ‘under the law, you must presume that every adult has capacity.’  

However, if you are concerned about someone’s decision-making capacity, official assessments can determine if they can legally make decisions. 

Assessing a person’s mental capacity is normally prompted when someone has difficulty expressing their thoughts, increasing trouble with language, a decline in cognitive ability or unusual and out-of-character behaviour.

Additionally, it’s important to consider that a person’s decision-making capacity can fluctuate depending on multiple factors such as:

• noise;
• location;
• personal stress;
• medication; or
• other people being around.

How can dementia affect a person’s decision-making capacity?

After a dementia diagnosis, you should talk to your doctor about your decision-making capacity. Your doctor will be an important person to help you when organising legal documents with a legal professional.

Depending on the progression and stage of your dementia, you and your family may decide that your substitute decision-maker should step in to make decisions on your behalf. This is why it is important to have all your legal documentation in place early on.

If you’ve not chosen a substitute decision-maker and you later experience a decline in your capacity to make decisions, you may not get a choice in who takes responsibility. Advance care planning is essential to help you maintain autonomy in older age.

What should I do now?

Legal documents can be made whenever you are ready but must be completed before you lose the ability to make decisions. 

Advance care planning means that you can highlight your wishes for your healthcare when you are older, even if you become unable to make legal decisions later in life.

Less than 30 percent of older Australians have a current advance care plan in place. 

Although organising legal documents such as wills and advance care directives/advance health directives is important, you must also consider if you want to give someone enduring powers of attorney and guardianship. This is required for people who do not have decision-making capacity and the selected person will make decisions based on the wishes or best interests of the person receiving care. 

Although the roles of enduring powers of attorney and guardianship vary across Australia, you can read more about the importance of advance care planning in the Aged Care Guide.

How does ‘capacity’ impact voluntary assisted dying?

Although criteria vary slightly between states, people seeking voluntary assisted dying in Australia must be aged 18 years or over, be able to make their own decisions and have a disease that is likely to cause death within a certain timeframe. 

Therefore, if someone has a reduced decision-making capacity, voluntary assisted dying will not be an option. It also cannot be included in legal documentation or advance care planning. 

At any stage of a serious illness, the primary goal of palliative care is to provide supportive care and improve the patient’s quality of life by addressing painful or distressing symptoms. 

The Aged Care Guide contains information guides to explain what palliative care is for and the difference palliative care can make in the dying process.

Although palliative care is given to provide someone with a more comfortable end-of-life situation, some people may want to learn more about voluntary assisted dying. 

Currently, voluntary assisted dying is illegal in the Northern Territory. The voluntary assisted dying bill was passed in the Australian Capital Territory on June 5, 2024, but will not commence until November 3, 2025, as per the Justice and Community Safety Directorate.

Eligible residents in Victoria, Western Australia, Tasmania, South Australia, Queensland and New South Wales can access voluntary assisted dying, dependent on specific eligibility criteria. 

More information is available about voluntary assisted dying from the following organisations:

• the Victorian Department of Health;
• the Western Australia Department of Health;
• the Tasmanian Department of Health;
• SA Health;
• Queensland Health; and
• NSW Health.

The main types of voluntary assisted dying are either self-administration of voluntary assisted dying medication or administered by a healthcare practitioner.

Did you know about the impact of a person’s ‘capacity’ on making choices for their aged care?

Let us know in the comments below.

Relevant content:

Organising legal matters when living with dementia

What is advance care planning?

The role of advocacy in aged care