Retirement village costs have received a lot of media attention recently and this story here in The Australian this week caught our eye.
Written by aged care consultant John Rawling, it seeks to compare costs at retirement villages and aged care facilities using the example of Mary, an 83-year-old widow.
She wants to move into a retirement village unit, but has also been assessed as being eligible for residential respite and low-care in an aged care facility.
Mr Rawling finds that Mary would be $105,000 better off in aged care than in a retirement village.
This may be true – but his article misses some key points. Firstly, he says that in the village, Mary would be responsible for all of her normal daily living expenses and utilities costs. In fact, you pay a weekly fee to cover maintenance costs (usually paid fortnightly to match the Age Pension). As Mary is on a full Age Pension of $888.30 per fortnight, this would easily cover this cost.
She would only need to pay for groceries and electricity or gas. You also won’t have to pay stamp duty on your unit when you do buy or sell.
Mr Rawling also argues that Mary would be liable for the costs of her home care, which would “probably go to thousands of dollars per year”. But if she has been assessed as being suitable for respite and residential care, she would also be able apply for a Commonwealth-funded home care package, which would cover the costs of any support services she may need.
Villages offer a sense of community
Finally, Mary simply wants to move into the village – even though she has mobility issues, she is still a “social person” and thinks the unit “would suit her better”.
You can’t underestimate the power of having a community of neighbours and friends to support you as you age – exactly what a retirement village provides.
It’s an argument backed up by one of the comments on the story from Kenneth, who moved into a WA village with his wife on 2005.
“Living retired in suburbia we found isolating with neighbours working and generally not interacting. The good ones up and left us. So, we chose village life for its social contact and activities.”
He also states that the couple carefully read their contracts and had a barrister read it – and had a clear understanding of the costs and fees involved before they moved in.
The message is clear. But don’t compare retirement villages with residential aged care – they are not the same.
For more information on retirement villages and their costs, visit villages.com.au.
Discussion1 Comment
I was a resident of a retirement village in Sydney from 1987 to 2004. My wife died in 1992 and after a lot of thought, I decided to vacate the unit and return to Brisbane where I had some relatives. I had none in NSW.
The residents had Tribunal and Court cases in NSW and Federal jurisdiction about the huge increase in maintenance fees. We ultimately lost mainly because the nominal defendant was out of time in making his application and also the various Courts had no precedents to guide them. The residents will always be at a disadvantage because the leases/agreements are those of the operators and they have all the protection that the residents cannot get. Ultimately we won a High Court case in February 2004 under the Trade Practices Act (Clth) for misleading and deceptive conduct by the operator. He immediately declared the company bankrupt and the residents were each out of pocket by $35,000 and in some cases more. Although the operator changed the leases were applied in the same way as the previous operator with whom we had all the cases. It is interesting to note that the High Court decision was one document signed by all 7 judges. One couldn’t get anything more straight forward than that.
I still am concerned that one day a case will be determined under the Contracts Law Act in NSW which could rule the Government act on retirement villages cannot override the contract which is after signed by the operator and the prospective resident.
I still worry about friends who live in retirement villages and the financial predicament they are now in. One person can afford the operators’ charges, another cannot. It is as simple as that.
The NSW Government will shortly consider the Greiner report but I doubt much will happen because the legal provisions in the contracts are so watertight. We had help from TV and Choice magazine but I am still glad I got out and am living in Brisbane in a low set building where my garage leads me into my lounge. In the village I had 13 steps to climb and my garage was 30 metres from my unit. Rather difficult for a person who is now 91 and almost 92.
The industry is now mainly in the hands of big business where the delegated authority to the manager of one their villages is low level and only negotiable through a third party. At least a submission I made to the Productivity Commission was accepted and the Commonwealth rightly said that housing was a State responsibility. Imagine living in Perth and wanting to have personal contact with a Minister based in Canberra but representing an electorate in North Queensland. Everything favours the operators in this industry.