Two reasons Retirement Villages (RV) needed to be part of the #agedcarerc - #retirementviilages the new aged low care so Commonwealth laws needed. RV residents become more dependent on aged care taxpayer funding as their capital base is decimated by RV business model. @KenWyattMP pic.twitter.com/Vj8r099u06
— Les Scobie (@retvilldotnet) May 13, 2019
Showing posts with label Royal Commission. Show all posts
Showing posts with label Royal Commission. Show all posts
Tuesday, 14 May 2019
Aged Care Royal Commission & Retirement Villages
Thursday, 11 April 2019
Aged Care Royal Commission Should Include Retirement Villages
Two reasons #retirementvillages should have been part of Aged Care Royal Commission, they are the new low care aged care so Commonwealth laws needed, the retirees become more dependent on taxpayer funding for aged care as their capital base is reduced. #agedcarerc #agedcare @smh pic.twitter.com/N4p9WXspdK
— Les Scobie (@retvilldotnet) April 10, 2019
Tuesday, 26 March 2019
Increased Aged Care Taxpayer Burden from Retirement Villages
Retirement Villages transfer retiree capital wealth to operators, not for property ownership but simply occupancy, and then sends retirees back to the taxpayer for Aged Care funding. @acccgovau #auspol @KenWyattMP @ScottMorrisonMP @Bowenchris #agedcarerc @abc730 @terpsmlc @sdanck pic.twitter.com/Kw9nUmdQvd
— Les Scobie (@retvilldotnet) March 25, 2019
Excessive Drain of Capital Away from Retirement Village Residents
Aged Care RC must look into cost to the Australian taxpayer of excessive reduction in the capital base of retirement village residents during their occupancy and their subsequent need for greater aged care funding when the time comes. #agedcarerc @acccgovau #auspol @KenWyattMP pic.twitter.com/TQ7Dr19exP
— Les Scobie (@retvilldotnet) March 24, 2019
Tuesday, 19 March 2019
Aged Care Funding Negatively Impacted by Retirement Villages
#agedcarerc should examine the negative financial impact retirement villages have on the capacity of older Australians to fund / help fund their own aged care costs. At what cost to taxpayer? @ScottMorrisonMP @Bowenchris @billshortenmp @CatherineKingMP @JulieCollinsMP @KenWyattMP pic.twitter.com/VAHn9tl9jV
— Les Scobie (@retvilldotnet) March 18, 2019
Thursday, 14 March 2019
Retirement Villages Negative Impact on Aged Care Funding
Retirement Villages can have a dramatic negative impact on the capacity of retirees to fund their own Aged Care. What is the impact on the taxpayer, how many extra taxpayer dollars are required as a result? @adele_ferguson @ScottMorrisonMP @Bowenchris @billshortenmp #agedcarerc pic.twitter.com/pGzYow8vWQ
— Les Scobie (@retvilldotnet) March 12, 2019
Saturday, 29 September 2018
Cost to Taxpayer and Aged Care Budget
Retiree pays $800,000 to enter retirement village, 7 years later exits with $490,303 (down $309,697) requiring aged care placement. What is the cost to the taxpayer and aged care federal budget? @adele_ferguson @MichaelWestBiz @amy_bainbridge @albericie @MichaelPascoe01 #auspol pic.twitter.com/cNt1hn4cdD
— Les Scobie (@retvilldotnet) September 26, 2018
Saturday, 22 September 2018
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.
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.
Federal Laws Needed for Retirement Villages
There are many reasons why the Royal Commission into Aged Care should include Retirement Villages. One critical matter is whether retirement villages should continue under a jumble of state laws or come under federal law.
The industry direction for residential Aged Care and Retirement Villages is a closer relationship and where possible a joint facility where the operator is a registered care provider, providing in home care to the residents of the retirement village section.
This leads to aged Australians spending a longer period in a retirement village and a shorter period in residential aged care. Critically this will mean older Australians will spend most of their latter years under State Government legislation rather than Commonwealth legislation.
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
The proposed Royal Commission should at a minimum look into whether retirement villages, for the reasons outlined in the material above, should come under Commonwealth law.
The industry direction for residential Aged Care and Retirement Villages is a closer relationship and where possible a joint facility where the operator is a registered care provider, providing in home care to the residents of the retirement village section.
This leads to aged Australians spending a longer period in a retirement village and a shorter period in residential aged care. Critically this will mean older Australians will spend most of their latter years under State Government legislation rather than Commonwealth legislation.
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
The proposed Royal Commission should at a minimum look into whether retirement villages, for the reasons outlined in the material above, should come under Commonwealth law.
Friday, 21 September 2018
Age Calls For Retirement Villages Into Royal Ccommission
Melbourne Age calls for Retirement Villages to be included in Aged Care Royal Commission. https://t.co/ucoJOO5AIH The need for Federal legislation, the Deferred Management Fee business model, just two of the areas requiring examination. @abc730 @sdanck @neighbour_s @4corners pic.twitter.com/tyIDi1tApo
— Les Scobie (@retvilldotnet) September 17, 2018
Aged Care Royal Commission Must Include Retirement Villages
Retirement Villages MUST be included in the Aged Care Royal Commission - https://t.co/hvCrz5XPUJ Now is the time for real Retirement Living reforms, it will take legislators with courage . @KenWyattMP @ScottMorrisonMP @GregHuntMP @Bowenchris @billshortenmp #AgedCareRC #auspol pic.twitter.com/Pr032qMnPw
— Les Scobie (@retvilldotnet) September 19, 2018
Thursday, 20 September 2018
Private Equity And Aged Care
Although written in 2007 this article is so relevant today as the government calls a Royal Commission into Aged Care.
Article by Marie del Rama - Centre for Public Governence, University of Technology, Sydney.
"While some private equity activities have been highly publicized such as the failed takeover of QANTAS by a consortium of players, another industry sector is quietly being transformed by private equity's presence. It is the aged care sector.
If you are planning to retire or are reviewing nursing homes for an aged relative, the chances are the retirement village or nursing home is owned - or will be owned - by a private equity group. As we have heard often enough, be alert but not alarmed for some parts of the aged care sector in this country is now in the hands of the large private equity groups: Macquarie Capital Alliance Group or MCAG, Babcock and Brown, ANZ Capital, AMP Capital, CVC Citigroup and others.
Why aggressive private equity players should take such an interest in a sector that is by all means, intents and purposes concerned with looking after the sunset stage of life is a conundrum but upon closer inspection, it makes sense and is a logical business decision. It is a growing sector - we are an ageing population. There are many candidates on the waiting list for a nursing home place. The needs of elderly Australians will increasingly dominate the national agenda as their requirements and services will impact our economy and political decisions.
Previously, the aged care sector was mostly catered to by non-for-profit charitable organizations such as the Salvation Army and others. When I emailed a Uniting Church representative on why they were in the sector, their response was:
Caring for people has been a principal Christian activity for 2,000+ years. Churches ran the world's first orphanages, hospitals, schools, universities and hotels. In the 20th Century, Churches pioneered the care of older people...The first services provided specifically for older people were accommodation-type services for homeless older men or women. Convalescent and other hospitals were also an expression of this sense of mission to minister to older people.
In 2004, the Salvation Army sold most of its nursing homes to Retirement Care Australia, part of Macquarie Bank's private equity behemoth, MCAG. It was not an easy decision for the Salvos. Press reports at the time cited their decision to sell out was mostly due to the operating costs and the capital needed to ensure their homes were up to standard.
A reason Macquarie bought the homes is outlined on its website: The aged care industry provides stable, underlying revenue streams and predictable cash flows, primarily from government funding and subsidies.
AMP Capital, which is the funds management arm of AMP, bought a for-profit organization Principal Aged Care. For AMP Capital, the aged care arm is part of their Social Infrastructure Fund. This fund is marked as mature in the business life cycle, and investors should expect an annual income yield of 8-10% over the next 11 years.
Earlier this year, I made a submission to the Senate Committee on Private Equity. In it, I stated:
In entering not for profit sectors, private equity investors have turfed out traditional non-profit organizations as they compete for the same pool of government funds and subsidies. Indeed, the allure of government subsidies have made the aged care sector a most attractive, stable 'investment' as part of a 'social infrastructure fund'.
The aged care sector is too important to be carved out by the desires of private equity Wall Street-type managers for short-term gain. The long-term pain will be felt by most Australians, especially those who have people close to them using aged-care facilities.
On the positive side, the influx of money that private equity has brought into the sector is improving a lot of facilities. They bring a certain amount of professionalism and corporatism. The managerial and resource capabilities private equity have in contrast to the non for profits is incomparable. Of course, as private equity players have to make a profit, they usually focus on the high-end of the market leaving those who can ill afford aged care to the charities and non for-profits.
However, given the amount of money our private equity funds have in their respective financial warchests - surely, at the very least - they do not require the government subsidies that they currently use in their prospectuses to attract investors. In a competitive sector, subsidies have the unhealthy habit of distorting the market place. If private equity is the purest expression of unfettered market capitalism, why enter a highly subsidized sector?
After all, do we really need our public taxes to be subsidizing Macquarie Bank?"
Marie dela Rama
Centre for Public Governence
University of Technology
Sydney
Private Equity and the Australian Aged Care Sector
Article by Marie del Rama - Centre for Public Governence, University of Technology, Sydney.
"While some private equity activities have been highly publicized such as the failed takeover of QANTAS by a consortium of players, another industry sector is quietly being transformed by private equity's presence. It is the aged care sector.
If you are planning to retire or are reviewing nursing homes for an aged relative, the chances are the retirement village or nursing home is owned - or will be owned - by a private equity group. As we have heard often enough, be alert but not alarmed for some parts of the aged care sector in this country is now in the hands of the large private equity groups: Macquarie Capital Alliance Group or MCAG, Babcock and Brown, ANZ Capital, AMP Capital, CVC Citigroup and others.
Why aggressive private equity players should take such an interest in a sector that is by all means, intents and purposes concerned with looking after the sunset stage of life is a conundrum but upon closer inspection, it makes sense and is a logical business decision. It is a growing sector - we are an ageing population. There are many candidates on the waiting list for a nursing home place. The needs of elderly Australians will increasingly dominate the national agenda as their requirements and services will impact our economy and political decisions.
Previously, the aged care sector was mostly catered to by non-for-profit charitable organizations such as the Salvation Army and others. When I emailed a Uniting Church representative on why they were in the sector, their response was:
Caring for people has been a principal Christian activity for 2,000+ years. Churches ran the world's first orphanages, hospitals, schools, universities and hotels. In the 20th Century, Churches pioneered the care of older people...The first services provided specifically for older people were accommodation-type services for homeless older men or women. Convalescent and other hospitals were also an expression of this sense of mission to minister to older people.
In 2004, the Salvation Army sold most of its nursing homes to Retirement Care Australia, part of Macquarie Bank's private equity behemoth, MCAG. It was not an easy decision for the Salvos. Press reports at the time cited their decision to sell out was mostly due to the operating costs and the capital needed to ensure their homes were up to standard.
A reason Macquarie bought the homes is outlined on its website: The aged care industry provides stable, underlying revenue streams and predictable cash flows, primarily from government funding and subsidies.
AMP Capital, which is the funds management arm of AMP, bought a for-profit organization Principal Aged Care. For AMP Capital, the aged care arm is part of their Social Infrastructure Fund. This fund is marked as mature in the business life cycle, and investors should expect an annual income yield of 8-10% over the next 11 years.
Earlier this year, I made a submission to the Senate Committee on Private Equity. In it, I stated:
In entering not for profit sectors, private equity investors have turfed out traditional non-profit organizations as they compete for the same pool of government funds and subsidies. Indeed, the allure of government subsidies have made the aged care sector a most attractive, stable 'investment' as part of a 'social infrastructure fund'.
The aged care sector is too important to be carved out by the desires of private equity Wall Street-type managers for short-term gain. The long-term pain will be felt by most Australians, especially those who have people close to them using aged-care facilities.
On the positive side, the influx of money that private equity has brought into the sector is improving a lot of facilities. They bring a certain amount of professionalism and corporatism. The managerial and resource capabilities private equity have in contrast to the non for profits is incomparable. Of course, as private equity players have to make a profit, they usually focus on the high-end of the market leaving those who can ill afford aged care to the charities and non for-profits.
However, given the amount of money our private equity funds have in their respective financial warchests - surely, at the very least - they do not require the government subsidies that they currently use in their prospectuses to attract investors. In a competitive sector, subsidies have the unhealthy habit of distorting the market place. If private equity is the purest expression of unfettered market capitalism, why enter a highly subsidized sector?
After all, do we really need our public taxes to be subsidizing Macquarie Bank?"
Marie dela Rama
Centre for Public Governence
University of Technology
Sydney
Wednesday, 19 September 2018
Aged Care Staffing Ratio Campaign
The Australian Nursing Midwifery Federation is mounting a campaign to secure staffing ratios in Aged Care facilities.
They are asking Australians to let their political representatives know how they feel on the issue. You can do so via this link - http://timeforruby.anmf.org.au
"There’s a law that means there’s one carer for every four toddlers in childcare. But in aged care, there are no staff ratio laws to protect elderly Australians like Ruby. Our nurses and carers do an amazing job, but they need your help. Go to http://timeforruby.anmf.org.au to let your federal politician know that they can’t ignore the issue any longer. We need staff ratio laws for aged care NOW."
They are asking Australians to let their political representatives know how they feel on the issue. You can do so via this link - http://timeforruby.anmf.org.au
"There’s a law that means there’s one carer for every four toddlers in childcare. But in aged care, there are no staff ratio laws to protect elderly Australians like Ruby. Our nurses and carers do an amazing job, but they need your help. Go to http://timeforruby.anmf.org.au to let your federal politician know that they can’t ignore the issue any longer. We need staff ratio laws for aged care NOW."
Tuesday, 18 September 2018
Retirement Village Royal Commission Called For
A Melbourne Age newspaper editorial called for retirement villages to be included in the royal commission into aged care.
"As The Age has said for years and demonstrated with many shocking stories, the aged care sector requires radical reform. Numerous inquiries have reached similar conclusions.
The brief needs to extend beyond what was announced by Mr Morrison. He neglected to mention retirement villages – a glaring and unacceptable omission. Such villages form a multibillion-dollar sector also plagued by many instances of poor treatment of the elderly and financial scandal. Evidence should not be shackled by federal/state sensitivities."
The full story can be read here - https://www.theage.com.au/national/aged-care-royal-commission-needs-to-include-retirement-villages-20180917-p504cj.html
Aged care royal commission needs to include retirement villages
"As The Age has said for years and demonstrated with many shocking stories, the aged care sector requires radical reform. Numerous inquiries have reached similar conclusions.
The brief needs to extend beyond what was announced by Mr Morrison. He neglected to mention retirement villages – a glaring and unacceptable omission. Such villages form a multibillion-dollar sector also plagued by many instances of poor treatment of the elderly and financial scandal. Evidence should not be shackled by federal/state sensitivities."
The full story can be read here - https://www.theage.com.au/national/aged-care-royal-commission-needs-to-include-retirement-villages-20180917-p504cj.html
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.
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.
Monday, 17 September 2018
Royal Commission For Retirement Villages?
An advocate for retirement village reforms wrote to the relevant Ministers Greg Hunt and Ken Wyatt asking for retirement villages to be included in the Royal Commission into Aged Care.
"Dear Ministers,
"Dear Ministers,
There are many reasons why the Royal Commission into Aged Care should include Retirement Villages but I would like to draw your attention to one critical matter.
The industry direction for residential Aged Care and Retirement Villages is a closer relationship and where possible a joint facility where the operator is a registered care provider, providing in home care to the residents of the retirement village section.
- This leads to aged Australians spending a longer period in a retirement village and a shorter period in residential aged care. Critically this will mean older Australians will spend most of their latter years under State Government legislation rather than Commonwealth legislation.
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.
The proposed Royal Commission should at a minimum look into whether retirement villages, for the reasons outlined in the material above, should come under Commonwealth law.
Thank you,
Les Scobie"
Sunday, 16 September 2018
Royal Commission Into Aged Care
The Sydney Morning Herald reports -
" The Morrison government will establish a royal commission into Australia’s aged-care sector following a string of horrific revelations of elderly abuse and neglect that have shattered public faith in the system.
The full story can be read here:- https://www.smh.com.au/politics/federal/pm-calls-royal-commission-into-aged-care-after-inexcusable-failures-20180915-p5040n.html
" The Morrison government will establish a royal commission into Australia’s aged-care sector following a string of horrific revelations of elderly abuse and neglect that have shattered public faith in the system.
Prime Minister Scott Morrison will announce the dramatic measure on Sunday, as figures show complaints about the sector have skyrocketed and authorities have forcibly closed one aged-care service a month since a crackdown triggered by the Oakden nursing home scandal.
“Our aged-care sector in Australia provides some of the best care in the world ... However incidences of older people being hurt by failures of care simply cannot be explained or excused,” Mr Morrison said in a statement. "
The full story can be read here:- https://www.smh.com.au/politics/federal/pm-calls-royal-commission-into-aged-care-after-inexcusable-failures-20180915-p5040n.html
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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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