What is ‘capacity’ and why does it matter?

‘Capacity’ is the legal word for a person’s ability to make decisions. 

Under Australian law a person who is 18 years of age is assumed to have capacity. This means that they can make all their own decisions. Australia has signed the Convention on the Rights of Person with Disabilities which states in Article 12 that people with a disability are presumed to have capacity to make decisions that affect their lives. 

A person with capacity is able to make decisions affecting their daily life, such as:

• Where to live
• What to buy
• What support or services they need
• When to go to the doctor.

A person with capacity also has the power to make decisions about matters that have legal consequences, including:

• Making a will
• Marriage
• Entering into a contract
• Having medical treatment.

Generally, a person who has capacity to make decisions can:

• Understand the facts involved
• Understand the choices involved
• Weigh up the consequences of the choices
• Understand how the consequences affect them and others
• Communicate their decision. 

Capacity is decision specific 

It is very rare for a person not to have capacity for any decisions. However, this can happen when a person is, for example, unconscious or has a severe cognitive disability.

If a person lacks capacity then this often relates to the making of more complex decisions. Some examples of why capacity is decision specific include the following scenarios:

• A person might be able to decide where they want to live (a lifestyle decision), but not be able to decide whether to sell their house (a financial decision); or
• A person may be able do their grocery shopping (a financial decision), but not be able to buy and sell shares (a more complex financial decision). 

Capacity can vary 

Capacity varies from person to person and from situation to situation. Capacity is not something solid that you can hold and measure, as it is affected by a person’s abilities and by what is happening around them.

Capacity may also be influenced by a person’s cultural background and experience. Indigenous Australians living in a remote community may not be able to complete a Centrelink form but have in-depth knowledge of their practices, families and communities which must be respected.

Everyone’s abilities vary and everyone reacts in their own way to their environment. For example, some people enjoy being in noisy places or busy places such as shopping centres, but others find this very stressful.

Each person’s capacity can fluctuate, depending on things such as their mental and physical health, personal strengths, the quality of services they are receiving, and the type of support needed.

The level of capacity a person has at a particular time can depend on the following factors:

• Whether the decision is simple or complicated.
• How much information the person has been given, and what their level of understanding is about the information.
• The type of decision being made. Is it a financial decision, a health decision, some other kind of decision like a lifestyle decision?
• The timing of the decision. Is the person tired? Is the person more able to make decisions in the morning, for instance?
• Communication-related factors. Sometimes a person with a disability may need assistance to communicate, a language or signing interpreter or advocate, or a particular Alternative and Augmentative Communication (AAC) strategy.
• The physical environment in which the decision is being made. Is the environment noisy or is the situation stressful? Does the person live in the suburbs of a city or in a remote Indigenous community?
• The cultural environment in which the person lives. Is English the person’s first language or their second or third language? Were they born in Australia or did they arrive here from another country?
• The person’s experience. How much knowledge of, or familiarity with, the topic does the person have?
• Health. Does the person have an illness or condition that worsens from time to time and affects their capacity, such as a mental illness or the effects of drugs, alcohol or anaesthetic?
• Personal stress. Is the person dealing with any social issues which may cause them stress at the time of decision-making?
• Duress. Is the person making the decision in a circumstance where they are being bullied or forced?

This article is one of a series extracted from the Discover Guide, a 122 page comprehensive guide to the NDIS prepared by La Trobe University in conjunction with Endeavour Foundation and funded by the National Disability Insurance Agency.  The guide aims to help people understand the various parts of the NDIS and how to access them. It also includes additional legal information - such as wills, guardianship, trusts and estate planning - for people with a disability and their families. Casey, G., Keyzer, P., & O’Donovan, D. (2016) Discover (2^nded.). Melbourne: La Trobe University.