"Living in a retirement village has the capacity to be a great lifestyle decision, sadly it also has the capacity to be your very worst financial decision." - RETVILLDOTNET.
An example for a village with the Deferred Management Fee calculated on the ingoing $$$.

"My father must have been one of the few people who lost money when he sold his home in a booming Melbourne property market. This huge loss on his home, in a popular suburb not far from the CBD, was despite it selling for more than he paid for it. The problem? He bought into a retirement village." - Diana Thorp. Sunday Herald Sun. 22/08/21
An example for a village with the Deferred Management Fee calculated on the outgoing $$$.

Tuesday 18 September 2018

Royal Commission Needed For Retirement Villages

Why the recently announced Royal Commission into Aged Care must include Retirement Villages.

There are many reasons why the Royal Commission into Aged Care should include Retirement Villages, attention should certainly be given to one critical matter.

An important point here is that retirement villages operate under state laws not federal laws as is the case with residential aged care.

The industry direction for residential Aged Care and Retirement Villages is a closer relationship and where possible a joint facility. The operator becomes a registered care provider and delivers home care packages to the residents of the retirement village section.

This leads to older Australians spending a longer period in a retirement village and a subsequent shorter period in a residential aged care facility. Sounds ok but critically this will mean older Australians will spend most of their latter years under State Government legislation rather than Commonwealth legislation.

One glaring example of the danger in this situation is -

Under federal law it is mandatory for an aged care operator to have an emergency evacuation plan and assembly point. Under Victorian retirement village law there is no mandatory requirement for a retirement village operator to have an emergency evacuation plan or assembly point.

Professor Tim Kyng from Macquaire University and Paul Latimer from the Swinburne Law School have both made persuasive arguments for retirement villages to come under federal law.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3030570

https://www.parliament.vic.gov.au/images/stories/committees/SCLSI/Retirement_Housing/FINAL-SCLSI-RHS-16112016-MU.pdf

https://www.parliament.vic.gov.au/images/stories/committees/SCLSI/Retirement_Housing/RH-Presentation-16112016-MU.pdf

Retirement villages INCREASE the number of older Australians that are dependent on the taxpayer funding for aged care such is the financial destiny of retirement village residents. A flatter or falling property market into the future will make it even worse. When it comes time to enter an aged care facility older Australians living in retirement villages require this increased taxpayer funding as a result of the 'deferred management fee' purchasing mechanism inherent in retirement villages.


The proposed Royal Commission into aged care should look at retirement villages, for the reasons outlined in the material above.

retirement village royal commission

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Function of Government

The role of government is to create an environment for commerce to function whilst at the same time protecting retirees and particularly vulnerable retirees from both financial and emotional harm emanating from that function.

The Victorian Retirement Villages Act 1986 provides the environment for commerce to function but fails to fully protect retirees from financial and emotional harm as a result of it.

The Victorian legislative definition of a retirement village in demanding the payment of an 'in-going' amount without the transfer of property ownership is a major contributor to that financial and emotional harm suffered by retirees.


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