When evaluating options for retirement living, it is important to understand the difference between a retirement village and aged care services, and to choose a solution that is right for your needs and financial circumstances.
It can be helpful for your lawyer to work with a financial planner or accountant to evaluate and explain the impact the arrangements will have on your aged pension, and any other Centrelink benefits, and to structure your finances and assets to assist with means testing. You may also need advice on whether a family home should be retained, sold, or leased, and how these decisions will impact your estate planning.
Retirement villages are private offerings comprising community-style developments with independent accommodation and shared common facilities such as swimming pools, libraries, and meeting rooms. Social events, craft and leisure activities may also be provided.
Aged care services, by contrast, involve a higher level of supported care, are government funded, regulated, and assessed under Commonwealth laws. Entry into a retirement village does not result in an automatic entitlement to aged care services and potential recipients of these services must be individually assessed.
Most retirement villages are independently owned and operated with the quality of accommodation and level and range of services offered varying between villages. Legal arrangements can include an outright purchase, loan-licence or leasehold agreement and the fees and charges can vary considerably.
Some retirement villages arrange for visiting health professionals and have staff with a health background, however a retirement village is not an aged care facility or nursing home.
Retirement villages in South Australia are governed by the Retirement Villages Act 2016 (SA) and Retirement Villages Regulations 2017.
Before entering into a retirement village, operators must give potential residents specific information to help them make an informed decision. This includes a copy of the residence contract, disclosure statement, financial statements, minutes, residence rules and any applicable code of conduct. The information should detail the initial and ongoing payments required under the contract, the terms and conditions that will apply on occupying the residence, the applicable cooling-off rights and what happens when a resident leaves the retirement village or dies.
The residence contract is the primary document governing the legal relationship between a resident and the retirement village operator. It includes the resident’s rights and obligations under the contract and must not contain provisions that are contrary to the requirements under the relevant laws.
When assessing a retirement village, we recommend that you:
- Make enquiries and shop around for a village that offers the accommodation and services you need given your age, health status and interests.
- Inspect the facilities and services on offer – they should be sufficient for your needs but not excessive – you don’t want to be paying for the upkeep of golf courses and tennis courts if you do not enjoy these activities.
- Read the by-laws and rules carefully so you understand what is expected of the residents and if there are restrictions such as the keeping of pets, visiting times and car parking.
- Ask other residents about the village you are considering and discuss your decision with your family members.
- Have all disclosure information and the proposed contract reviewed by a lawyer who can help you understand important matters such as:
– your full financial commitment including the purchase price, initial contributions, ongoing maintenance, service fees and exit fees;
– your entitlement to use common areas and a description of personal services included and their costs;
– settling in periods and your obligations if you decide to leave the village including exit fees, refunds and how these are calculated;
– whether an early refund applies if you require a higher level of care earlier than expected;
– any applicable cooling-off / termination rights;
– refurbishment costs and your rights regarding those costs;
– the entitlement of your estate to receive a refund and how this is calculated and when it is paid.
Entering a retirement village or aged care facility is an important financial and lifestyle choice. We can help make the process easier by advising on the applicable laws regarding aged care assessments and accommodation expenses, reviewing retirement village contracts and the effect these arrangements may have on your estate planning.