Retirement village residents to get greater fee transparency
The NSW Government has signalled it will ensure there are more transparent fees for retirement village residents through new laws.
They will also seek to ensure that exit entitlements paid more quickly when residents depart their village.
Minister for Better Regulation, Kevin Anderson, said the new reforms will improve access to exit entitlements, create a new mechanism to support residents moving to aged care, and place a 42-day cap on the payment of recurrent charges for general services.
“We promised to make retirement village fees fairer, and these reforms will put residents first, saving them thousands of dollars and giving them access to their exit entitlements sooner when they leave the village,” Mr Anderson said.
Under the changes, if a unit remains unsold after 6 months in metropolitan areas or 12 months in the regions, residents will be eligible to receive their exit entitlements if the village operator has not taken reasonable steps to facilitate a sale.
The reforms respond to several key recommendations of the independent report into NSW Retirement Villages conducted by Kathryn Greiner AO, which found residents could wait years for their unit to be sold by the operator before they received their exit entitlements.
“Waiting extended periods of time to receive your exit entitlement can cause a financial and personal burden. That’s why we’re putting in a safety net that will require operators to buy back the unit from the resident if they don’t use their reasonable endeavours to sell it within the appropriate time period.”
“We’re also capping recurrent charges, such as office management and gardening fees, at 42 days after a resident moves out.”
Mr Anderson said the Government is also making it easier for retirement village residents to transition directly into aged care.
“More than 60 percent of residents transition from villages directly into aged care accommodation. However, under the status quo, many can’t afford these costs if their unit does not sell quickly.”
“Under the reforms, the operator will need to cover a portion of the estimated exit entitlement directly to the aged care provide, allowing a seamless transfer.”
Retirement villages currently accommodate over 66,000 retired people, and this number is expected to double by 2033.
New laws to deliver on the reforms will be introduced into the Parliament later this year.