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Groups push for national retirement village regulation

The Commonwealth says it will look at new oversight measures for retirement villages while seniors call for new national regulations.

Minister for Aged Care Ken Wyatt said the Federal Government would expedite work across relevant portfolios and the states and territories, which have overall responsibility for retirement villages, regarding retirement villages regulation.

Ken Wyatt

It comes after a joint report by Fairfax and the ABC’s Four Corners program on Monday night which aired long-held concerns about the contracts used in retirement villages.

The program, which focused on major retirement village operator Aveo, featured current and former residents who said they were negatively impacted by complex contracts and confusing marketing.

Mr Wyatt said that in the context of the cases highlighted by the program, the government will consider the recommendations of both a 2007 Parliamentary inquiry and a 2011 Productivity Commission review.

“The government will identify which recommendations can be taken forward, to prevent these situations occurring again, in consultation with the states, territories and the retirement sector,” Minister Wyatt said on Tuesday.

However, the 2011 Caring for Older Australians report recommended the regulation of retirement villages remain the responsibility of state and territory governments, and should not be aligned with the regulation of aged care services.

Ian Yates

Council on the Ageing Australia called on the government to consider implementing a national regulatory system for retirement providers.

COTA Australia chief Ian Yates said seniors’ welfare too often slips through the cracks in the Commonwealth-State regulatory system, with inconsistent and inadequate laws confusing residents and families.

“While an overwhelming majority of retirement village residents are happy with their living arrangements, the Four Corners investigation highlights much more work needs to be done to reduce the complexity of contracts and fee structures, and explain them properly.”

Contracts remain difficult to navigate, despite various attempts by state governments to legislate plain English summary disclosure, Mr Yates said.

Ian Henschke

National Seniors repeated its longstanding calls for uniform legislation governing retirement villages.

Chief advocate Ian Henschke said the program had shown the sector was “in dire need of a makeover to overcome piecemeal state laws that left older people locked into increasing fees and charges, including exit fees.”

He said a simple, standard, fair universal contract and a commissioner to oversee any complaints were clearly needed.

Australian Greens spokesperson on Ageing Senator Rachel Siewert said national action, including regulation, was needed.

She called on government to immediately look to address exit fees and complicated contracts, and examine the interaction between aged care legislation and retirement villages.

Industry working on simpler contracts: peak

The Retirement Living Council, the peak body for retirement living operators, said the industry, including Aveo, has been working to simplify its contracts in recent years.

It points to industry surveys that have found 83 per cent of residents regard their fees as reasonable and 70 per cent say the cost of living is the same or less than when they lived in their family home.

“The deferred management fee model used by most retirement village operators enables residents – of which the vast majority access an age pension – to effectively part-pay for their unit at the end of their tenure when their place is resold.

“This means a lower entry price that makes village living more accessible and affordable,” the peak said.

In a detailed response to the program, Aveo said that it restructured the contract that residents sign when moving into an Aveo retirement community in 2015.

The organisation said that this new contract, developed after extensive consumer research, provides customers with clarity on the costs of living in, and subsequently moving out of, an Aveo retirement community.

You can read Aveo’s full response here

Aged and Community Services Australia said a large proportion of not-for-profit providers operated retirement villages, providing accessible housing for low to moderate income earners with their lower upfront fees and weekly rental.

“ACSA members believe Australians choosing to live in retirement villages are entitled to contracts that are clear and transparent, and communicate rights and obligations in plain English,” said ACSA chief Pat Sparrow.

“We also support ensuring existing consumer protections assist residents where, and when, any problems occur.”

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8 Responses to Groups push for national retirement village regulation

  1. Al Friend June 28, 2017 at 12:08 pm #

    I’ve lived in a retirement village for over 10 years. It’s badly managed by an unqualified person paying herself a 6 figure wage for working 4 days a week. She works hand in hand with the operator to gouge as much money out of residents as they can to pay expenses the operator should rightfully be paying like painting buildings residents don’t own ($350,000) and replacing timber allowed to rot by the operator’s neglect (another $30,000 to $50,000). It’s a rip-off and residents are almost powerless to stop that sort of thing. Government Members and Ministers have been told about it all but they don’t take action.

  2. r. gibbs June 28, 2017 at 2:34 pm #

    Federal Government needs to act immediately to fix the blatant exploitation of the elderly. All contracts across all retirement villages need to be made null and void. They are cruel and exploitative. Please do not just say it is a State government responsibility and pass it off to someone else. Those contracts are eye watering unfair if not criminal. If you only do one thing in this role let it be to fix this corruption against the elderly.

  3. Sue Kline June 28, 2017 at 2:35 pm #

    Al Friend’s scenario is so similar to the conditions in my retirement village I swear we must be neighbours!
    The rapacious operators are free to continue their pillaging of older residents with the seeming imprimatur of government bodies.
    It’s a pity the likes of John Hatton are still not on the scene to come to the aid of oppressed retirees in need of fearless representation…long overdue.

  4. Synelg Cassi June 28, 2017 at 7:36 pm #

    Synelg Cassi

    How absolutely disgusting about these money grabbing retirement villages. Exploiting the old people who made this country great. Shame, shame, shame.

    Come on Federal Government. Don’t let these immoral places rob our old.

  5. Barbara Irving June 30, 2017 at 2:48 pm #

    Who says an overwhelming majority of retirement village residents are happy with their living arrangements? The figures given were that there were 184,000 village residents BUT from the McCrindle Bayne village census that was given out only 4933 residents replied from across 236 villages.

    Out of this number 1,012 were identified as having moved into the village within the past 24 months and it was 98% of this number that ticked the box ‘happy to be in the village’. Not 184,000, not even the 4933 that were returned. 98% of the 1012 newest residents. Makes you wonder about how happy the other 3921 are.

    How to make numbers tell the tale you want them to. Residents who had moved into a village within 24 months were chosen because they hadn’t had the time to be disillusioned.

    Survey results should show how many went out and how many were returned so that an honest percentage can be shown from all the results, not just from a portion.

    Many people in our village simply won’t fill these forms in because some can’t be bothered, but many do not trust that they will be anonymous and repercussions could ensue if they wrote anything against management.

  6. Gary June 30, 2017 at 5:53 pm #

    I live in a retirement Village with pool communal centre bus etc could not be happier.
    I paid $270,000 for a lease on my villa, understood that it is my responsibility to repair replace and maintain all fixtures and fitting in my villa. I pay a reasonable GSC each month which pays for all my charges except the electricity I use in my home, the food I eat and the phone calls I make everthing else comes out of the GSC which also has a maintenance reserve portion in it as well. ALL of this is clearly written in the Queensland RV contracts and also in the QLD RV Act. It allows me to budget for the year because I know exactly what I have to pay each month and what I am paying it for.
    I understand that 35% of what I paid for my villa ($270000) will be retained by the operator once again all clearly explained and written in the contract. 2bedroom villas with all the amenities that I have would normally be selling for 370000 plus. I get to use that 100,000 for what ever I want while I can still use it. I am buying a $370000 villa for only $270 000 and paying back the 100 000 interest free when I have moved on and the villa is sold.
    I use all the things here at the village so yes I should help pay for their upkeep as well.
    Whingers that didn’t read or don’t understand their contracts and expect to get everything free just because they get a pension. NOTHING is for free, so if we want to live in inner-city independent living retirement villages we should expect to pay. But what all the moaners above have failed to mention is they are happy to use the operators money while they are living there just don’t want to pay it back when they move out.
    Read the contract, understand the contract get legal advice from a lawyer who understands what is a retirement village. ONLY buy into a retirement village and not a over 55 or lifestyle village etc as these places you are not protected by a state government legislation. Most importantly understand what you are buying.
    RV Act in Queensland could not be simpler I’m 84 and have no trouble at all understanding it.
    Stop whinging you are making us “OLDIES” look simple and daft.
    I LOVE RETIREMENT VILLAGE LIVING best thing I ever did.
    Gary from Caboolture Queensland

  7. Barbara Irving July 5, 2017 at 9:04 pm #

    Good to hear you are so happy in your Retirement Village Gary and that you totally understand your Contract. You must be one of a few that have an understanding of such a convoluted document, usually biased in favour of the Operator. I agree that before people move into a Retirement Village they should have their Contract read by a Solicitor. However, sadly, there are not many Solicitors who are familiar with these types of Contracts which still leaves the would be resident vulnerable.

    I also agree that the majority of would be residents should know (because they should have been told by the Sales staff before signing the Contract) of the Exit Fee, or Deferred Management fee as it is sometimes called. Cynically, I have to say, many Sales staff are not always as truthful as they should be and the fact that residents will have to pay this fee when they leave is omitted, while other items from the Glossy Brochure are emphasized .

    How, may I ask, do you come to the conclusion you bought a villa worth $370,000 for just $270,000? Actually, unless you live in a FREEHOLD village you didn’t ‘buy’ your villa at all. You have paid for a ‘Lease/or Loan License’ on it at a cost of $270,000 and if it is worth $370,00 then that is what you would have paid for your Lease/Loan License. Please don’t kid yourself. The Operator wasn’t kind enough to ‘lend’ you $100,000 interest free! The Operator buys a business and is there to make a profit. If he doesn’t make a profit then he loses the business; no one is denying common business practices.

    You may get 65% of what you paid for your villa – but it appears that the Operator is getting 35% AND ALL the Capital Gain ! Are you really sure that you think that is fair? You may also (depending on your Contract) be charged for ‘reinstatement’ when you leave – which some Operators take to mean REFURBISHMENT to the tune of thousands of dollars. All of which will come out of the little you will have left out of your $270,000, after the 35% has been taken out.

    You state, according to your Contract, you also have to repair, maintain AND REPLACE all the fittings and fixtures in your Villa. If a Leasehold/Loan License village, usually the Capital items in your Villa would be replaced by the Operator.

    Residents pay for all repairs and maintenance through the General Services Charges – fair enough, no argument and you can budget a year at a time. Each year though you will have to find more money because, guaranteed, your fees will rise. How well can you read the village budget ? Well enough to make sure it is compliant and the total of general services has not increased by more than the CPI (section 106 of the Retirement Villages Act). OR are you so happy with your Operator you trust him not to try to “fix” the budget to his advantage?

    The Retirement Village industry is a ‘user pays’ industry. What we don’t want is to pay more than we should because the Operator tries to gouge more money out of the residents than he is entitled to.

    Operators build a village, put in swimming pools, club houses, bowls rinks etc., These are the facilities you pay for when you leave – not any pie in the sky interest free loans. This is what your Exit Fee (Deferred Management Loan) is for – this is the only profit the Operator makes – or should make! I don’t object to paying this but I do object to paying for things I shouldn’t be paying for.

    Unfortunately you don’t really understand either your Contract (not a Contract I would have signed – NO CAPITAL GAIN and REPLACEMENT at own expense of major items in the Villa) or the Retirement Villages Act if you truly believe we are protected by government legislation. The legislation is weak as water, slanted to the Operators side, not the residents and you cannot take it as Law until the pertinent section has been ruled upon by either the Tribunal or a Court of Law.

    I would suggest that you are still in the ‘honeymoon’ stage of retirement village living. Enjoy it while you still have some money left!

  8. Tezza Izzard September 24, 2017 at 3:32 pm #

    It is all very well to focus on Retirement Villages.But and it is a very big but!Lifestyle villages never get a mention in regard to the Federal Govenment making legislative changes to protect the residents who reside in them for protective legislation in regard to security of tenure.I have since 2007 I have made multiple submissions to State Govt(WA) and to Ken Wyatt the minister for ageing all to no avail

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