12th Jan 2015
FONT SIZE: A+ A-
Retirement living sector review
Retirement living sector review

The complex fee structure employed by the retirement living sector is to be reviewed in an attempt to prepare it for the projected growth in Australia’s ageing population.

The retirement living sector is fragmented, with the mix of church and charity-based owners, private operators and large-scale companies making it difficult to have a cohesive fee and payment schedule across the industry. In a move which could make decisions easier for those planning a move to a retirement village, Price Waterhouse Coppers (PwC) Australia and the Property Council of Australia (PCA) will carry out a review of the sector.

The review is in response to operating in the sector requesting to have greater transparency and from consumers and advocates for unified rules and standards. This is especially important, as there is a real need for policy makers to have a clear understanding of how the sector operates if they are to make informed decisions concerning the fastest-growing sector of the population. PwC real estate director, Tony Massaro, was reported in Fairfax media as saying that, "The sector is quite fragmented, not least in terms of ownership, and the information from this database will allow stakeholders to develop insights into the industry as they plan and execute their strategies that help shape the future of the sector".

Mr Massaro also said that as more Australians than before are moving into retirement villages, there was a need for all stakeholders to have access to comprehensive information in order to make informed decisions. "… Treasury predicting Australia's over-65 population will double by 2050, greater understanding of the sector among asset allocators and bankers is critical to guaranteeing that senior Australians have adequate choices about where they live in their retirement," he said.

PCA Executive Director Mary Wood agreed that the data collected would be of value to investors and policy makers. "A wide range of market-critical information will now be housed in a single source," she said.

Read more at SHM.com.au

Opinion: They are not the same

While the news of a review of the retirement living sector is welcome, it’s doubtful that it will fully remove the confusion amongst those seeking options for accommodation later in life. That the retirement living sector is fragmented is no surprise. It’s not only the range of operators in the field, but also the fact that the legislation and contracts are governed under state law, which means they can vary greatly depending on where you reside.

There is also the confusion between aged care and retirement village living, which is compounded by facilities offering both, yet different legislation applies to each. Indeed, even in the Fairfax media article there is an initial mention of aged care although the health and aged care sector is clearly separate and not covered by this review.

Retirement living is not the same as aged care.

Those entering retirement living villages have a choice of whether or not to do so – it’s a lifestyle decision. Whereas for those who need to enter aged care, it’s often a necessity as they can no longer care for themselves and, sadly, often can’t afford to live in the facility that they, and their families, would prefer.

Clearly, the first directive for the review should be to help consumers and stakeholders understand the difference between retirement living and aged care.

Do you understand the difference between aged care and retirement living? Have you been put off considering a retirement village option due to complex contracts and legislation? Do you think a review could be helpful to consumers?





    COMMENTS

    To make a comment, please register or login
    Queensland Diva
    12th Jan 2015
    10:26am
    My inlaws were caught up many years ago in the buy into this retirement village now at a cheaper price racket. They paid a little less than they might have and in return, they would only receive back what they paid for the unit when they left - however, the company who owns the village is now charging $40K for refurbishment, and we have to pay for all the electricity for the whole time it's being done (they haven't even started yet and it's been empty for about 6 weeks). We also have to pay the monthly fees of about $360 until the unit is sold - consequently, my father-in-law's estate will receive only about $60K from the sale of the unit, which will sell for about $320K. There's something wrong somewhere.
    miss aisle
    12th Jan 2015
    12:10pm
    Cannot see how the electricity & monthly fees are being charged,
    on top of the $40K !

    Surely you are able to get a list of the intended refurbishment ?
    (which you are paying for).
    Don't know whether you've contacted a solicitor,
    but, I would be inclined to have at least one visit with
    a reputable one, to find out exactly where things stand.
    I wish you all the best, Queensland Diva.
    Rose
    12th Jan 2015
    4:40pm
    Have just been through a similar experience in Qld (Gold Coast) but I negotiated with the village that I would seek out a private contractor to do the refurbishment. Contractor met with village management discussed their expectations, sighted a recently refurbished studio in the village and quoted/completed the refurbishment for $9000 less than the village quoted. The studio has subsequently been sold per the village real estate for $10000 less than the original purchase price 18 mths prior. After taking their $20000 exit fee plus monthly fees/utility expenses while probate/refurbishment were being finalised etc including a massive water bill from a burst pipe somewhere on the village site which was charged to all residents the estate received $45000 less than the original purchase price despite the studio being refurbished to a far superior condition than when it was purchased. Compared to others I have met we had a better outcome (not without undue stress during our grieving period) in this seemingly unaccountable industry of rip off merchants.
    Rose
    12th Jan 2015
    4:49pm
    PS - Don't waste more money on paying for a solicitor to investigate these organisations as few solicitors specialise in the complexities of retirement living & there are too many loopholes used by these organisations. I used our probate solicitor to do they conveyancing of sale also - again because it was cheaper than using theirs. I did use their real estate people to advertise and sell the unit because there was no additional charge for that.
    HS
    12th Jan 2015
    10:47am
    $40,000 to refurbish? Refurbish what? New kitchen, new bathroom? Pay for electricity when there's no one in the unit? $360 a month in fees until sold? You got to be joking! This is a blatant rip-off! They are stealing your money!!! Irrespective of what the contract states, it's unconscionable business conduct. Why state governments haven't done anything in the past to stop these rip-offs is beyond me. What a bunch of thieves!
    Ductape
    15th Jan 2018
    8:18am
    Wherever there a organisations who have a license to print money, (retirement villages are one of them) there you will find a politician at the back of them. That's just one of the carrots which drags these cretins into politics in the first instance.
    Tim@toc
    12th Jan 2015
    11:03am
    Another good reason do abolish the damned states.
    Bes
    12th Jan 2015
    12:27pm
    Right ON! The system we live in was left by our colonial English government. England only had one government for one country. When they found out how large Australia is they implemented 6 such governments with 6 state governors.
    It now costs us dearly, both financially, the politicians retirement costs, our laws, our taxes/stamp duties etc. Our police are forced to extradite criminals from other states.....in the same country?
    Polly Esther
    12th Jan 2015
    11:14am
    Yes, yes and yes.
    Queensland Diva
    12th Jan 2015
    12:43pm
    Thank you miss aisle - yes, I think we should have a chat with a solicitor.
    longman
    12th Jan 2015
    1:25pm
    Australian unity run centers seem to ripoffs. RvHomebase in QLD seems to be set up the right way,would still need to research
    cinusti
    12th Jan 2015
    1:59pm
    We recently checked out a nearby retirement village and were horrified at all the money they wanted for us to live there.
    First there was the cost of the unit; an entry fee of 2% of the purchase price of the unit; body corporate fees of about $100 per month, a care fee of $225 a fortnight and I presume electricity as well.

    Then there was the exit fee which was 5% of the sale value during the first year,7.5% the second year, 12.5% the third year and 25% the fourth and subsequent years.

    Needless to say we're staying where we are even if it difficult for us both to manage the stairs

    Now it that's not highway robbery I don't know what it is?
    jeffr
    12th Jan 2015
    4:33pm
    The most prolific industry in Australia is greed,sadly we do not have politicians who will so something about it.
    Ductape
    12th Jan 2015
    2:54pm
    Yep! Most of us enter this world with nothing and these parasitic aged care facility owners are going to make damn sure we leave the same way!
    Tom Tank
    12th Jan 2015
    3:50pm
    Sorry Ductape but you have fallen for the trap of not distinguishing between retirement Villages and Aged Care Facilities.
    In the case of Aged Care Facilities it stirkes me as being wrong that this sector is heading down the privatised road where profit is the name of the game and the residents in those facilities are the means to the profit.
    While there are checks made on the standard of care given there is no check on the recipients, ie the owners, of the Government funding. There have been cases of fraud and misappropriation of Government funding but nothing is getting done about that.
    Nan Norma
    12th Jan 2015
    3:01pm
    I've just been helping friend search retirement/resorts. You really do have to be careful as they all have their rules. To me it appears the more 'upmarket' you go into, the more the rules. My friend has now settled in. No entry/exit fee. $240 a fortnight site fees. No rates to pay,no water rates to pay. She pays her own electricity. She gets rent allowence of $122.60 a fortnight. That leaves her to pay about $58 week. For this she gets the gardening. Two swimming pools. gym,huge library, cummunity room with free tea and coffee, parklands, social activities. Free bus to the shops twice a week. hairdresser and doctor visit, and parklands. Plus very helpful staff.
    You really do need to do your homework before buying into these places. Ask lots and lots of questions. Get everything in writing.
    Nan Norma
    12th Jan 2015
    5:23pm
    With agedcare you pay a bond, it's like a lease. Then you pay weekly fees depending on how much money you have. The bond is for your rent. How much,this will depend of the facility. Also, there is low care and highcare depending on need. The goverment has put figures on this too. It is not cheap. If you live a long time your bond money may run out. It really is very complicated.
    Paddles
    12th Jan 2015
    8:48pm
    I was fortunate and prescient enough to enter into a retirement village operated by one of (then) Australia's best regarded aged carers.

    As a consequence, I moved in in my late fifties and now, as I approach 80, I have an almost certain guarantee of hostel accommodation and then nursing home care if it comes to that.

    I am involved in the administration of my village and, representing them at higher management level, I have a fair overview of the industry and have been obliged to keep appraised of Government initiatives in this area.

    Because of my experience, I fail to see a need to further need to educate people on the difference between aged care and retirement living. This is assuming that prospective residents have English as a first language. Just how far must the Government go in their "hand holding"?
    Nan Norma
    12th Jan 2015
    9:01pm
    Puddles, You do sound rather condescending. I concider myself fairly well educated in affairs concerning older people but I sometimes find it bit confusing, especially as the government is always changing the rules.
    A retirement village is not an aged care facility. I do agree some places do provide aged care at a price if you need it later down the track. These are usually the more expensive facilities. If you live in a village and needing more support you can have the same support you might have if you were still living outside the village: blue nurses , cleaning etc.
    Blossom
    12th Jan 2015
    11:04pm
    I understand that refurbishment is taken out of the % they withhold. They should not be charging you separately for it. I strongly suggest you check the contract that your in-laws signed. Get the electricity transferred back to the village owners or disconnected. You need a final reading for the state. Refund wise check the contract. It is probably worded that the estate gets a % of what was paid for it.
    If it is semi-independent and meals were provided in fees you shouldn't being paying electricity anyway. If you have an executor (solicitor etc) ask them to approach the Retirement Village to buy it back from the estate. Make sure the Retirement Village has received a copy of the Probate document. There is nothing to stop them starting to work on the unit but legally they cannot release money until they get it. If they deny having received it make sure they are sent another copy. I know one village that was sent 3 copies before they admitted to having received it.
    Rose
    13th Jan 2015
    4:44am
    In my experience refurbishment costs were in addition to the $20000 withheld. Contracts leave a lot to the discretion of the village management ie what may or may not be required to be upgraded or refurbished & by whom. Power can't be disconnected if the unit needs to be refurbished & village owners are not likely to pay for power. As for the village buying it back we would have received less than half of the original purchase price. You know when you enter these villages you are not likely to make money on your investment - you are paying for a lifestyle however you don't expect to lose more than half the value of your original purchase within an 18mth period. It is to your advantage to move in when you are younger say 55yrs & enjoy longevity for the others though too many people are being ripped off.
    Barbara Mathieson
    13th Jan 2015
    8:15am
    Minister for The Aged should be a Portfolio position. We have an aging population in Australia last time I looked!
    jan5
    13th Jan 2015
    7:29pm
    hi nan norman
    where is this village that you put your friend into
    Sounds like what I'm looking for,you can adsvise me anytime
    Nan Norma
    13th Jan 2015
    7:41pm
    where are you.
    Nan Norma
    15th Jan 2015
    7:31pm
    Its in Waterford Qld. Is that any good to you.

    12th Mar 2015
    7:51am
    Seriously you shared very very attract information and I appreciate your effort for that.
    buy ritalin online

    12th Mar 2015
    8:26am
    I read much information but never this one before Thanks a lot for sharing.
    buy valium roche

    12th Mar 2015
    8:58am
    I dont know how to thank but you share really informative and great information with us. Thanks
    buy adderall online

    12th Mar 2015
    9:42am
    I saw many websites but I save those pages that have good information like this one.
    buy xanax online

    12th Mar 2015
    9:43am
    Everyone needs to read interesting and informative knowledge like this one. Thanks
    buy oxycodone pills

    19th Mar 2017
    6:13pm
    I read this post. this is informative post. great job admin. thanks for sharing. Driver Booster Keygen
    Nan Norma
    19th Mar 2017
    9:07pm
    What's going on with the adverts???
    Nan Norma
    19th Mar 2017
    8:58pm
    It seems everybody wants to take their 'cut' from the elderly these days. They want to fleece you before you go. From what I have seen, the more 'upmarket' the village is the more they squeeze you for every cent.

    11th Jul 2017
    7:51pm
    I sincerely thank you for the things you have done, sure your blog will help more people. Sincerely thanks
    http://bloxorzonline.com


    Join YOURLifeChoices, it’s free

    • Receive our daily enewsletter
    • Enter competitions
    • Comment on articles