Financial support... or not...

Kelly

Is the money definitely being used for your sisters sole use?.
Somebody could use a parents funds for half the cost of a new car.
Some people may say this is misappropriation of money but if the parent uses the car with the son / daughter driving it is probably not.

Frank

I agree with a previous post - how did you find out? Did some other 'helpful' soul make a point of telling you. And have you asked your sister why she needs to use the money, what problems does she have? And thirdly, she is in a way quite right, they are symbiotic, sharing each other's lives and if it is just the two of them, is it so very different from any other partnership where everything is shared.

Does your sister have a power of attorney?
Is your grandma compos mentis?
How did you find out what was happening?
How old is grandma?

It may be that grandma sees personal expenditure by your sister as payment for her caring role. Have you asked your grandma about this?

If her expenditure is classified as payment for caring, it is less likely to be regarded as deprivation of assets if residential care becomes necessary.

If your grandmother doesn't know or doesn't understand then this is deprivation of assets. If your grandmother ever does need residential care. She will have a financial assessment. Where if this is discovered, there will be a legal case to answer.
If grandmother isn't aware then maybe pointing this out to your sister may have an effect.
If she is aware are there any other family members who can back you up in persuading them both that this is not a good idea.

The first question that came to mind was: Does your grandmother know this?
If she knows, does she mind?
If she doesn't know, can you (should you) tell her?