Negative Impact Of Retirement Villages On Aged Care Funding

With home care packages retirement villages are becoming quasi aged care. They must be part of the Aged Care Royal Commission, the financial impact on retirees of retirement villages means they can require more aged care funding when the time comes.

Retirees often sell their only major asset, the family home. They then pay an in-going amount often commensurate with a purchase cost but are granted only a conditional lease / licence to occupy. Then pay maintenance fees, administration fees, selling costs on departure, a Deferred Management Fee often 35 % to 45% of the in-going amount, little or no access to any capital gain plus the refundable amount repayable on departure is devalued by CPI in  each year of occupancy. All on a property they do not own, only occupy.

When the time comes to move to an aged care facility the vale of their capital base is so diminished they have to go back to the Federal Government for greater assistance with their aged costs than might otherwise be had they chosen a different path than a retirement village.

Retirement Villages are acknowledged as good social environments in which to live, but they can come at a huge capital cost to the retiree and subsequently increasing the cost of aged care funding on the taxpayer.