To gain access to a retirement village you must have reached 55 years of age or have retired from full time employment. Once you have made a decision that this lifestyle will suit you, speak to your solicitor or lawyer about the fee and legal structures for such villages, as contracts are many and varied.
The financial implications of moving to a retirement village can be complex and comparing retirement villages with varying legal structures and departure fee structures can be difficult, so make sure you speak to your solicitor and financial planner for as much information as possible. Here is some basic information about what you need to know.
- Types of Retirement Villages
- Accommodation and Facilities
- Levels of Care
- Departure Fees
- Home and Residence Choices for Older People
Types of Retirement VillagesThere are basically two kinds of retirement village: resident funded and donor funded. The latter are invariably owned and operated by led not for profit organizations. They include an element of charitable subsidy and entry is generally restricted to the needy. The former may be owned and operated by the private sector or by not for profit organizations and they are conducted on a commercial basis to produce a profit or surplus, respectively. Sometimes it’s hard to tell the difference between a profit and a surplus.
Accommodation and facilitiesThe size and style of retirement village accommodation varies enormously, from bed-sitter apartments to spacious brick and tile homes. Most retirement villages have common areas and a range of facilities available for the use and enjoyment of all residents. More recent ones cater fully to the semi retired and baby boomers, featuring sports facilities, cafes, and restaurants. They more closely resemble resorts and gated communities, both of which are emerging housing options.
Levels of careA number of terms are used to describe the level of care that is provided in a particular village or in relation to particular units.
Units that are described as independent living units or self-care units provide the lowest level of care, although a range of personal services may be available on request on a user pays basis under an arrangement known as flexicare.
Units that are described as assisted living units or serviced apartments provide the highest level of care, usually including the regular provision of a range of personal services.
Confusion sometimes arises because low level residential care facilities, previously known and often still referred to as hostels, are also described as assisted living units.
Hostels and nursing homes are regulated and partly funded by the Commonwealth Government and different legislation, admission criteria and funding arrangements apply.
LegislationEach State and Territory has enacted specific legislation that regulates the operation of retirement villages. The legislation in each area is different and has its own definition of what is and what is not a retirement village.
In some cases the legislation applies differently to different legal structures and contractual arrangements. Particular legal structures and contractual arrangements may also attract the application of other legislation, such as strata title, community title, companies and securities, manufactured home or tenancy legislation.
CostsThe costs incurred from selecting a retirement village can include:
- an initial entry price when you move in.
- recurring service charges during your stay and possibly afterwards
- a departure fee when you leave.
The nature of the initial entry price depends on the particular legal structure. For example, it may be the purchase price of a freehold property, security or other asset, or it could be a loan, premium or prepayment of rent.
Departure feesDeparture fees are particularly important and particularly difficult to fully understand. There are well over a dozen different departure fee structures and they are a key factor in determining how much you (or your estate) get back when you leave the village. Depending on your financial resources, how much you get back could well determine or limit your future accommodation choices.
Home and Residence Choices for Older PeopleA useful publication by the Australian Government Department of Families, Housing, Community Services and Indigenous Affairs is Accommodation Choices for Older Australians and their Families which aims to help older Australians, their families and those who care for them, with important lifestyle and housing decisions.