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
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?
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