The Napthine government will introduce new legislation into Parliament on Wednesday to clarify guardianships rules and expand guardianship orders.

The changes will update and simplify the state’s guardianship laws, which first passed in 1986 and were mainly designed to help people with intellectual disabilities, who were then moving out of institutions and into the community.

A 2012 report by the Victorian Law Reform Commission made 440 recommendations to rewrite the state’s guardianship laws, which are now mainly used by dementia sufferers, the mentally ill and those with acquired brain injuries.

''The new legislation will make it easier for individuals and their families to provide for their current and future decision-making needs through guardianship and administration arrangements,'' Attorney-General Robert Clark said.

He said a number of the reforms in the legislation stemmed from the commission’s report, which said decision-making capacity was not an “all or nothing” concept.

Under the changes, a person will be presumed to have capacity “unless there is evidence to the contrary”.

Mr Clark said current laws were unclear about when a person has capacity to make their own decisions.

The changes also expand the range of orders that can be made by the Victorian Civil and Administrative Tribunal, allowing the appointment of a single guardian for personal and financial matters.

''This removes the need to resolve whether a particular matter is about personal care or financial issues, and whether it is to be attended to by a guardian or an administrator,'' Mr Clark said.

The law also create a new legal role known as a ''supportive guardian'' - who will help disabled people make their own decisions.

''The introduction of a supportive guardian role will allow greater autonomy for many people with disabilities by enabling them to take care of their own needs once they have practicable and appropriate support.''

Other proposals put forward by the commission included letting people set directives for future healthcare and medical treatments for conditions they have not yet developed, and expanding the Office of the Public Advocate’s powers to investigate the abuse and exploitation of people with impaired decision-making abilities.

But these recommendations have not been included in the first stage of reforms, with the Attorney-General saying more reforms would be announced.

Women’s Mental Health Network Victoria executive officer Sally Gibson said the presumption of capacity in the new laws was particularly important when people with a mental illness receiving guardianship services wanted to report sexual assault.

''It would mean that people with a mental illness receiving guardianship services would feel a greater sense of empowerment to make, or be supported to make, their own decisions.''

The Office of the Public Advocate, which provides guardianship services for disabled people, has previously said it supports nearly all of the commission’s 440 recommendations. The OPA says on its website that due to ''unprecedented demand'' there is a delay in the allocation of guardians to clients.

In 2012/13, 10,942 applications for guardianship were made in VCAT.

The reforms also create a streamlined application process for parents of disabled children who want formal guardianship rights and duties over their child after they turn 18.

-with Amy Hall

henrietta.cook@fairfaxmedia.com.au