The investigations into Aveo revealed a number of issues and complaints including complex contracts with some well over 100 pages long, extortionate departure or exit fees, ongoing crippling fees and oppressive rules. Currently retirement living regulations are governed by individual state and territories.
One resident on the program says it was such a let-down to feel that you’re in this place where everybody is out to skim that little bit more from and you it’s all about the money. Another likened it to being in a grubby fairy tale.
While Dr Kay Patterson Age Discrimination Commissioner is calling on State and Federal governments to work together and make sure older Australians aren't trapped in retirement villages, National Seniors believes the whole industry needed a legislative overhaul by the Federal Government to protect the financial abuse of senior Australians when they were arguably at their most vulnerable.
National Seniors Chief Advocate Ian Henschke believes a simple, standard, fair universal contract and a commissioner to oversee any complaints were clearly needed. “Many people buy into retirement villages expecting to have autonomy and security in their later years,” he says.
“Instead, more people are being faced with unaffordable increases to ongoing fees and charges and reduced service standards, causing them a great deal of worry and, at times, fear and a sense of persecution.”
Chief Executive of Council of the Ageing (COTA) Australia Ian Yates says while most retirement village residents lead fulfilling lives, older Australians' welfare too often slips through the cracks in the Commonwealth/State regulatory system, with inconsistent and inadequate laws confusing residents and families.
“While an overwhelming majority of retirement village (RV) residents are happy with their living arrangements, the Four Corners investigation highlights much more work needs to be done to reduce the complexity of contracts and fee structures, and explain them properly,” he says.
“Contracts should be simplified and standardised which will allow for comparability and equip older Australians with more power and information to make a well-informed choice when selecting a provider.”
He feels far too many people become RV residents without fully understanding it is not usually a real estate purchase and you don’t have the same controls you would have if you owned your own home.
“The most popular business model for RV operators in Australia is that of the Loan-License/Deferred Maintenance Fee, which is not intuitively understood by most people and too often poorly explained by operators. It is not even properly understood by many lawyers, accountants and financial advisers,” he highlights.
Various inquiries over the years have looked at a Commonwealth role in RV regulation, starting with the 2007 inquiry and subsequent report ‘Older People and the Law’, which put forward a number of recommendations that were never implemented.
Mr Yates says RV contracts are not really about Real Estate. Rather, they are a financial product whereby people have a licence to live in an RV unit, and there a myriad of financial and personal risks attached to this model.
“They should be subject to regulation by the Australian Securities and Investment Commission (ASIC) and the Australian Competition and Consumer Commission (ACCC), not under-resourced and inappropriate State tenancy tribunals,” he says.
He says now is the time to reconsider a Commonwealth role, or at least standardisation of legislation across States through COAG. “When it boils down to it, older Australians deserve the utmost clarity and consumer protection when they are choosing where and how they should live in the latter stages of their life.”
Mr Henschke says anyone going into a retirement village needs to seek legal advice before they sign a contract. “Because the rules vary from state to state and even village to village, that means if you are considering multiple properties, you have to get a solicitor to decipher multiple contracts,” he says. “Buying into a village is not just a financial decision but a lifestyle one as well, and people need to be aware of the many pitfalls to avoid them.”
He believes to help even out the playing field for consumers, there also needs to be a retirement housing commissioner to monitor compliance and resolve disputes involving residents in retirement villages, as already occurs in Western Australia and New Zealand.
Minister for Aged Care Ken Wyatt says retirement villages are an important housing option for older people and the Government will consider the issues raised in recent media reports.
"We will expedite work across relevant portfolios and the States and Territories - which have overall responsibility for retirement villages - with respect to short, medium and long term solutions," he says. "The issues that have come to light show an emerging trend whereby aged care providers are also providing retirement-style living options."
He confirms the Government will consider all the recommendations of both the 2007 Parliamentary inquiry and the 2011 Productivity Commission review, in the context of the recently highlighted cases and it will identify which recommendations can be taken forward, to prevent these situations occurring again, in consultation with the States, Territories and the retirement sector.