Canberra’s retirement villages urged to be more transparent about where wages go

Retirement villages, billed as safe, independent and often luxurious living spaces for older Australians, are also said to be subject to “corporatised elder abuse”.

They are accused of leaving residents worse off financially when they leave. and having complex contracts.

There are approximately 40 retirement villages in the ACT where 3,500 residents call home.

An aging population means demand is increasing and more villages are under construction.

Canberra resident John Beagle, 92, described the industry as a “black hole” with little information and regulation.

He and his wife moved to their village under stressful circumstances about six years ago.

Mr. Beagle had just recovered from a health problem and the couple needed to move urgently.

It was an easy and quick decision to sell their home and move to a villa, and overall they were happy with their experience.

At this point in their lives, they aren’t worried about “what comes next,” including what will happen to their finances at the end of their time in their villa.

“You know, I’ve had a good life and I have no complaints.”

But that doesn’t mean Mr. Beagle, a longtime activist, doesn’t worry about what will happen to other residents who encounter problems along the way.

A few ways for residents encountering problems

In the ACT, retirement village residents can take their disputes to the ACT Civil and Administrative Tribunal (ACAT) and the ACT Human Rights Commission.

They can also approach village governments directly or present the issue to the residents committee.

Taking a matter to ACAT is something Mr Beagle did on behalf of a neighbour; However, he noted that this is something that all retirement village residents would not hesitate to do.

“The people living in retirement villages across Australia are basically vulnerable single women over the age of 80… all they want is peace, quiet and to spend time safely and without being bullied,” he said.

In 2022, Mr Beagle submitted a petition to the ACT government, calling on it to establish a retirement village ombudsman as a new regulatory body that could handle complaints.

While the government did not move forward on the issue, citing concerns including cost, it did agree to support the Human Rights Commission and its dispute resolution processes more broadly.

This was welcomed by Mr Beagle, who advocates star ratings for retirement villages these days; This is something that is of political interest.

Small numbers of ACT residents in retirement villages

The number of people living in care homes in the ACT is relatively small, and the group working with them is similarly small.

The ACT Retirement Village Residents Association (ACT RVRA), now chaired by former solicitor Anne Caine, works to defend the rights of residents and also assists people in trouble.

Ms Caine, herself a resident of a retirement village in Canberra, was impressed by the lifestyle and safety it offered.

Her husband had fallen down the stairs in their large family home and so they decided a change needed to be made.

Like others, they were attracted by the low-maintenance lifestyle, age-friendly building style and the fact that it made it easier to socialize and participate in activities.

ACT followed RVRA’s standard advice and had his contract checked by a lawyer.

This is particularly important in the ACT, where operators do not have a model contract and so each village can look very different.

Like Mr. Beagle, ACT RVRA wants it to be easier to compare the services each village offers.

But they think an online repository for contracts might be a better start.

Ms Caine supports moves such as calling for a model contract and a disclosure statement under which operators should provide a snapshot of their village’s legal and financial characteristics to potential residents.

ACT RVRA also encourages residents to include their families in their decisions to avoid potential shock later.

Ms. Caine acknowledges that retirement villages, which are for-profit operators, can charge residents for the lifestyle they offer.

This includes exit fees that can run into hundreds of thousands of dollars in some cases.

But he wants to see more transparency about where fees go and how much they contribute to operators’ profits.

He also supports independent MP Rebekah Sharkie’s moves at the federal level and is calling for retirement village contracts to be regulated as a financial product.

What does the legislation of the region say?

In the ACT, retirement villages are governed by the Retirement Villages Act 2012.

This legislation places limits on some fees and charges, including the legal costs the operator incurs in preparing the contract and how much it can charge if the contract ends during the settlement period.

It also notes that most recurring charges expire 42 days after the resident leaves, and in some models the resident receives their money back within six months of leaving the villa.

Although some other fees and charges are not capped, they must be specified in the contracts.

Of course, this does not mean that they are clear and easy to understand. A feature that has received criticism.

KJB Law’s Jo Twible agreed that many contracts were too complex to understand without the help of a solicitor.

And as one of the few lawyers working in this area, he said there’s a reason it’s so complicated.

Even in New South Wales, which has a standard contract, they will vary greatly depending on the offers from the village they choose.

There are many different types of retirement villages in Canberra alone.

This means different scenarios, both financially and legally, for residents depending on the type they live in.

Residents also have a choice about when to pay some fees.

Ms Twible agreed there was a need for more transparency about where operators make their profits, how big those profits are and what residents’ fees are used for.

So what’s next?

ACT Labor did not respond to the ABC’s request for comment before deadline.

But when asked about it at a press conference earlier this month, Prime Minister Andrew Barr said more work was needed in this area in the next Parliament.

“There are a complex set of interactions in this context around strata and unit title issues and the regulatory interface with the Commonwealth,” he said.

“I acknowledge the issues raised.”

He said it would likely go to a House committee for review before any changes are made to the legislation or regulation.

Ahead of the election, the ACT Greens said they believed the retirement village system should be “fair and transparent”.

“We agree that practices and protections around retirement villages need to be reviewed and costs such as fees and charges need to be clearly explained to potential residents,” the statement said.

They did not make a firm commitment on what changes they would implement, but said they would consider practices such as model contracts or capping exit fees.

Party leaders Shane Rattenbury also most recently served as consumer affairs minister in the ACT Legislative Assembly and some of this work began under his watch, they said.

Canberra Independents, who currently hold a seat in Parliament with Thomas Emerson, said during the election campaign they would be committed to improving financial transparency and regulation in the sector.

Although they are unlikely to achieve a balance of power, they have promised to set up a Strata Commissioner whose remit would include retirement villages and have the power to force operators to provide detailed breakdowns of how wages are allocated, managed and accounted for. .

They also backed calls for a star rating system.