In general terms, a person lacks capacity if they cannot understand the nature and foresee the consequences of decisions, or are unable to communicate them. The clinician is required to assess what degree of impairment the person has in relation to the applicable legal test. The four elements in the core functional test are used to assess the person’s ability to: understand, retain, use and weigh or reason – similar to “foresee the consequences” - and communicate a decision.

The PPPR Act has five different tests for capacity depending on the kind of decision-maker to be appointed or the decision to be made. For example, the threshold for appointing a welfare guardian requires that the person “wholly” lack capacity whereas the court may make a personal or property order if the person “partly” lacks capacity.

There are two different thresholds for when the Court makes an order (and a report form to complete):

Court orders

  • “partly” lacks the capacity: personal order, ss 6 and 10 (for example, medical treatment or living arrangements), order to administer property (low level assets and income); and “wholly or partly” lacks the capacity: property manager, s 25 (2)(b).
  • “wholly” lacks the capacity in respect of particular aspect(s) of a person’s care and welfare: welfare guardian,
    ss 6 and 12.


  © 2020 Alison Douglass