The emotional and monetary consequences of elder financial abuse take a toll on caregivers as well as seniors directly victimized, Allianz Life said Monday in releasing findings of a new study.
A vast majority of both active and prospective caregivers reported that they had incurred costs when their elder was financially abused, an average of $36,000, according to the study.
The new research expanded on a 2016 Allianz Life study of elder financial abuse. It involved a poll conducted in August with 1,000 respondents age 18 to 64 who were either actively providing care for a nonspousal elder 65 or older, or could be in a position to do so within the next five years.
The findings showed that the average caregiver spent some $7,000 a year and provided more than 10 hours per week doing chores for elder dependents, with many receiving no financial assistance for that support.
Researchers found that the costs to caregivers increased when the elder had already experienced financial abuse. Caregivers for past victims reported spending nearly $8,400 each year in direct cash and noncash, 56% higher than the amount spent by those caring for elders with no history of financial abuse.
Moreover, in cases where financial abuse had previously occurred, the elder’s need for some sort of direct financial assistance from the caregiver was more than double that of situations where financial abuse has not occurred.
“As America’s population ages, more people will be caregivers,” Allianz Life’s president and chief executive Walter White said in a statement.
“Unfortunately, these caregivers will be at risk of experiencing the negative effects of elder financial abuse perpetrated against the person they’re caring for. While a focus on protecting seniors from financial exploitation is vital, we also need to provide resources to caregivers who increasingly will become collateral victims of the elder abuse.”
Sen. Susan Collins recently introduced legislation that would protect vulnerable adults from financial exploitation.
Caregivers’ Retirement Compromised
Two-thirds of active caregivers in the study reported that the cost of providing care was significantly affecting their own finances. They worried about having enough money to retire.
In cases involving previous elder financial abuse, some 80% of caregivers expressed concern about the effects on both their current finances and their retirement savings.
Not only that, but the financial stress has raised a moral issue for many caregivers.
Eighty-one percent of current caregivers said it was OK to accept some of the elder’s money to cover expenses, if offered. However, only 66% said it was acceptable for a caregiver to self-reimburse for any expenses without informing the elder every time.
Although some 70% of caregivers surveyed said they were currently talking to their elder about financial abuse and scams, many said they hesitated to have frequent conversations.
Their reasons varied. Some believed it was none of their business, feeling that the elder was capable of managing his or her own finances. Others believed that such conversations made the elder uncomfortable.
A majority of active and potential caregivers agreed that a professional third party could help make these conversations easier, especially if past elder financial abuse had occurred.
Seventy-seven percent of caregivers for past victims of financial abuse said they would welcome the assistance of third-party professionals, as opposed to 43% in cases where the elder was not a victim.
“We continue to advocate the involvement of a third party in financial management — another family member or experienced financial professional — as a simple first step in building a system of checks and balances that can help prevent financial exploitation before it starts,” White said.
Indeed, given rampant elder financial abuse, advisors are well advised to take on the difficult task of fighting such fraud.
Allianz Life has developed a Caregivers Readiness Guide to help financial professionals start conversations with their clients about the potential need of caregiving for oneself, one’s spouse or for an elder family member.
The Better Business Bureau also offers tips for preventing elder financial abuse.