The main fee paid to enter a retirement village – the Deferred Management Fee (DMF) – has been under media and government scrutiny since last year’s Four Corners and Fairfax Media investigation, in particular Aveo’s ‘Aveo Way’ contract.
Now Aveo has unveiled two alternative options – Aveo Essentials and Aveo Certainty.
How are they different?
While the price you pay for your unit or fees for living in the village don’t change, the Essentials contract offers residents a 35% DMF over five years rather than the usual three.
The Certainty contract is for those who want a clear care path. This option allows you to transfer to one of their Freedom Aged Care units – or to certain aged care homes – without the cost of an extra DMF.
Offering a clear care path
Residents can also transfer to other Aveo villages under the contract, with transfers covered by a set fee of $2,000 a year paid on exit.
It sounds like a lot – but compared to the cost of paying a Refundable Accommodation Deposit (RAD), the main fee you pay to enter aged care, it’s a considerable saving.
It also addresses a common concern we often hear on our villages.com.au website – what happens if I need to transition to higher care quickly?
Aveo’s move follows other operators including Lendlease and Stockland which have both introduced new contract options this year.
Interestingly, both report that the traditional DMF contract is still their most popular option – the ‘buy now, pay later’ model allowing people to free up cash to enjoy their retirement now and pay when they ‘leave’ the village.
But more options are always welcome.
