Section 2 - What is capacity?


Section 2 has four parts. Select a link from the list below for more information about each topic.

What is Capacity?

In this Toolkit capacity is a legal word. A person who has capacity is able to make decisions about things that affect their daily life, such as:

  • where to live
  • what to buy
  • what support or services they need
  • when to go to the doctor
  • matters that have legal consequences, including: making a will, getting married, entering into a contract, having medical treatment.

People who have capacity are able to live their lives independently. They can decide what is best for themself and can either take or leave the advice of others.

Broadly speaking, when a person has capacity to make a particular decision, they are able to do all of the following:

  • understand the facts involved
  • understand the main choices
  • weigh up the consequences of the choices
  • understand how the consequences affect them
  • communicate their decision.
If a person doesn't have the capacity to make a certain decision, someone called a 'substitute decision-maker' might need to make the decision for them. There is more information about this in Section 3 'Capacity assessment principles' on page 27. (See principle 6.)

Capacity is decision specific

If you care for, or provide services to, a person whose decision-making is in question you may need to decide frequently (each time a decision is made) whether the person has capacity to make each and every decision.

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

More often, people lack capacity only in making one sort of decision. For example, a person might be able to decide where they want to live (personal decision), but not be able to decide whether to sell their house (financial decision). They can do their grocery shopping (make a simple decision about money), but not be able to buy and sell shares (make a more complex decision about money).

Case Study

Decision-specific capacity

'I have a grandfather with dementia. Sometimes he seems to know that I'm his grandson and other times he thinks Im his son. He has good days and bad days.

At one stage he needed an operation on both eyes because he had cataracts. When the doctor did the first operation, my grandfather didn't know what was going on. He was having one of those bad days and seemed to be stressed out about the hospital. He thought he was at the hospital campsite in the war. He couldn't understand the cataract surgery and the doctor ended up asking my dad to sign the forms to say he could have the operation.

It's funny, really, because when he went back to have the other eye operated on he seemed much better, and when the doctor talked with him he knew what was going on. I think the doctor realised this because he got my grandfather to sign his own forms that time. I don't know why my grandfather understood the second time. Maybe it was because he had done it before, or maybe he was just having one of his better days.'

Lachlan, grandson

What can affect a person's capacity?

Capacity varies from person to person and from situation to situation. Capacity is not something solid that you can hold and measure. Neither is it something that is the same all the time. It is affected by a person's abilities and by what's happening around them

Everyone's abilities vary and everybody reacts in their own way to their environment. For example, some people enjoy being in a crowded, noisy place but others find it stressful and difficult. Also, 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 and amount of any other support. This creates a challenge for you when undertaking a capacity assessment. 3.

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

  • the type of decision being made: Is it a financial decision, a health decision, some other kind of decision?
  • the timing of the decision: Is the person tired? Is the person more able to make decisions in the morning, for instance?
  • is the decision simple or complicated?
  • how much information has the person been given, and what is their level of understanding about the information?
  • communication between the assessor and the person: Is there effective communication in place at the assessment so each person understands the other? For example, neutral interpreters 4or advocates may be required, or a particular Alternative and Augmentative Communication (AAC) strategy may be needed 5 .
  • the physical environment in which the decision is being made: Is the environment noisy or is the situation stressful?
  • 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 anaesthesia?
  • personal stress: Is the person dealing with any social issues which may cause them stress at the time of decision-making?

Case Study

Timing, physical environment and capacity

'My aunt has an intellectual disability. I was appointed as her financial manager a while ago. Often I need to reassess which financial decisions she has the ability to make because I don't want to control all her finances when she can do it herself.

I spend time with her a couple of days a week, and after asking questions, I can see whether she is okay to look after her shopping and bills until I see her next. It usually depends on if she is particularly tired or stressed out about something happening around her.

Last week my aunt decided that she wanted to get a mobile phone. She knew exactly how much she wanted to spend and what she wanted it for. But when we got to the shopping centre it was very crowded and extra noisy. At the counter people were even pushing us to get past. My aunt couldn't concentrate and was anxious. She couldn't make a decision about the phone plans that the sales person was explaining to her. So I made that decision, based on what she had told me at home, and signed the contract on her behalf. We got out of there as fast as we could!'

Amrita, niece

Capacity can be regained

A person can regain capacity or increase their capacity. For example, they can regain consciousness or learn new skills that will enable them to make certain decisions for themself.

A further example relates to people with a mental illness. They can have capacity to make decisions at certain times but not be able to make some or all decisions at other times.

It is essential to remember that capacity is decision specific. This means that, where there is doubt, a person's capacity must be reassessed every time a decision needs to be made.

Case Study

Regaining capacity

'My daughter has a mental illness which, at times, means that she does not have the capacity to make health decisions for herself. Generally there are many signs and symptoms that alert me to the fact that the illness is beginning to become more severe and affect her capacity. When this happens, I start to become aware of her decision-making ability, particularly around health issues.

Sometimes she decides not to seek medical advice or rejects medical advice given to her. This is one sign that her capacity is affected because when she is well she doesn't make those same types of decisions. Anyhow,in these acute periods of illness I make her health decisions, and any other decision she is not able to make. Of course if the treatment was considered "special medical treatment" or she objected to my decision I realise I'd need to apply to the Guardianship Division of NCAT to allow them to make this decision.

The periods of illness vary in length, but my daughter always regains the capacity to make all decisions herself. Of course she then starts to make her own decisions without my interference.'

Helen, mother


3. See Section 4 'Tips on assessing capacity - Flexible assessments', on page 64.

4. Multicultural NSW has information about interpreters on their website: , select 'Services', click on 'Interpreting and translation' and 'Fact sheets'. Or call on 1300 651 500.

5. See Section 6 'How can I support a person to make their own decision? - Communicate in an appropriate way' on page 150.

Download the
Capacity Toolkit


Capacity Toolkit PDF (1.8MB)

Capacity Toolkit Fact Sheet Word (385KB)

Capacity Toolkit Resource Sheet

Capacity Toolkit Factsheet PDF (266KB)

Translated Capacity Factsheets

Decision-making & Capacity E-Learning

A FREE 30 minute E-learning based on the Capacity Toolkit has been designed for professionals who work with people with decision-making disabilities in legal, health, finance, social work and for carers. Learn how to empower people with decision-making disabilities to make decisions for themselves. To view select:

Decision-making and capacity E-Learning