The Transfer of Intergenerational Wealth

"Families need to be aware that what we are talking about here is the transfer of intergenerational wealth, not to families, but into the pockets of large multi-nationals.

Shame about elderly people not having enough money for aged care."

Tom Gait, Retirement Village Residents Association.

Tuesday, 25 June 2019

Financial And Emotional Harm To Victorian Retirees

Retirement Village Operators Get Legislated Protection.

Not Delivering For All Victorians

Capital Loss Danger for Retirement Village Residents

How a Retirement Village Really Works

Government Provides Sanctuary to Retirement Village Operators

Minister Questioned Over Retirement Village Inaction


Tania Maxwell MP Member for Northern Victoria questions Consumer Affairs Minister Marlene Kairouz over the lack of action on Retirement Village reform.


"My adjournment matter is for the Minister for Consumer Affairs.

It is about the ongoing delay in the Government’s response to the report of the Legal and Social Issues Committee’s Inquiry into the retirement housing sector that was tabled in March 2017.
Of all the matters canvassed by the committee in that report, the two to which I would like to direct the most immediate attention are covered by Recommendations 2 and 15.  Respectively, they called on the Government to:
  • review the Retirement Villages Act 1986, following sector-wide concerns especially around dispute resolution and transparency of disclosures; and
  • introduce a new alternative for low cost, timely and binding resolution of disputes, through a new body or by extending the powers of an existing ombudsman.
I wholeheartedly support both those recommendations, because they speak to changes which are still clearly and urgently needed.

Even as recently as last month, the Minister for Consumer Affairs was still saying the Government is committed to holding the review and further considering dispute resolution processes in retirement villages.

So, set against all of that background, the action I seek from the Minister is the provision of a definitive statement on the public record about when the review of the Retirement Villages Act 1986 will specifically begin.  As well as when a new body or extension of the powers of an existing ombudsman will be enacted to protect consumers.  In turn, I also ask that the Minister specify who is conducting the review, what its terms of reference are, and when it will report."

Read the full transcript here:- http://taniamaxwell.com.au/adjournment-review-of-the-retirement-villages-act-1986/




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Sunday, 23 June 2019

Legislated Definition of a Retirement Village

A major issue in Victoria with regard to Retirement Villages is the legislated definition of a retirement village requiring the payment of an in-going amount without the transfer of property ownership.

Allowing retirement village operators to:-
1. Charge a 'buy' type price to retirees, not for property ownership but only for a right to occupy.
2. Obtain access to retiree's capital/life savings at 0% cost to the operator without an exchange of property ownership.
3. Keep upwards to 40% of the retirees capital/life savings as a so called deferred management fee.
4. Take control of this 40% of the in-going payment over the first few years of occupancy.
5. Charge the retiree for maintenance, refurbishment and selling costs on property owned by the operator and that the retiree will never own, only occupy.
6. Excused from immediately paying back the refundable balance of the retiree capital/life savings on their departure from the village.
7. Repeat this process over and over and over again, the industry average stay in a retirement village being just 7 years.

Everyday residential landlords would love the same deal.

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.



The Transfer of Intergenerational Wealth.

Issues with the retirement village industry can be best summed up by the following statement from Mr. Tom Gait, the then President of the Retirement Village Residents Association.

"Families need to be aware that what we are talking about here is the transfer of intergenerational wealth, not to families, but into the pockets of large multi-nationals. Shame about elderly people not having enough money for aged care."


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Saturday, 22 June 2019

A Few Major Things Went Wrong

ABC 7.30 program reports:- 

Read the full story here:- Retirement Village residents unhappy about complex contracts and fees

Retirement village residents unhappy about complex contracts and fees.

"The aged care royal commission has uncovered some shocking stories about the treatment of older Australians. But the housing that many older Australians depend on, retirement villages, falls outside its scope. About 200,000 Australians live in these villages and rely on the support they provide.

But some are paying dearly to do so, signing up to complex contracts and worrying that the money they are spending now may leave them unable to afford aged care when they need it.

When Les Scobie and his wife paid just over $200,000 for their retirement unit in the Victorian town of Wangaratta, they were hoping for a quiet life. They knew that if they decided to sell up and move on, the operators of the village would keep about a third of their money in exit fees.  "The part that we didn't understand when we came in, was how little protection there was for you if something went wrong," Mr Scobie said. "And unfortunately, at this village, a few major things went wrong."

The former bank manager discovered he and other residents had been wrongly charged a combined total of more than $300,000. So, on behalf of hundreds of residents at the village, Mr Scobie took on the local Anglican diocese, which ran the village at the time, and won back most of the money.

Mr Scobie said retirement village residents were often vulnerable, especially when their health deteriorated and they needed to leave the village and go into aged care. He said retirement village residents needed to make sure they were not taken advantage of. "The industry really needs to be tipped upside down," he said."

Read the full story here:- Retirement Village residents unhappy about complex contracts and fees


Retirement Village v Residential Tenancy v Family Home

Retirement Village Residents Unhappy About Complex Contracts and Fees

Retirement Village Minister Questioned in Parliament

Transfer of Intergeneration Wealth not to Families

ABC 7.30 Report Highlights Retirement Village Issues

Retirement Village Policy Failure

Negative Impact on Capital Wealth of Retirees

Retirement Village Operators Granted Legislative Protection

Retirement Housing Does Matter.

Decade Without Meaningful Retirement Village Reforms

Retirement Village Operators Protected by Legislation

Danger for Retirement Village Residents

Long Wait for Loan Repayment

Thursday, 20 June 2019

Cost Of Leaving A Retirement Village

The ABC 7.30 Report has drawn attention to continued problems within the Retirement Village Industry.

Emphasis was drawn to the much maligned Deferred Management Fee and the lack of meaningful consumer protection available to residents when something goes wrong in their village.

Take the link below to watch the full story.

https://www.abc.net.au/7.30/the-cost-of-getting-out-of-a-retirement-village/11226126

Wednesday, 12 June 2019

Country Versus City In Retirement Village Payouts.

Information with Capacity to Mislead

Ambassador Rather Than Ombudsman

NSW Retirement Village Ambassador

Tuesday, 11 June 2019

New Push for Retirement Village Ombudsman

No Moral or Financial Justification

Deferred Management Fee Destroys Retiree Life Savings

Wednesday, 5 June 2019

Andrews Government Fails To Deliver

NSW ARCF Important Reform

Victorian Government Falling Behind Other States

LSIC Retirement Village Report Fails

Will 2019 Be The Year For Retirement Ombudsman

NSW Fair Trading Retirement Village Calculator

NSW Fair Trading Capacity to Mislead

Victorian Taxi Drivers Refusing Passengers

Queensland Government Seduced by Retirement Industry

NSW Fair Trading Fails to Deliver Complete Accuracy

Retirement Village Equals Destruction Of Retiree Capital

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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