Following the much-discussed Four Corners X Fairfax investigation into Aveo retirement villages Australia wide, the exploitation of Australia’s retired population who have chosen the retirement-community lifestyle option has fallen under the microscope. With headlines such as ‘Bleed them dry until they die’, hidden fee structures, endless fine-print contracts and accusations of ‘churning’ quotas makes apparent a need for further discussion…
It’s important to first note that the Four Corners investigation into Aveo focussed on issues within their retirement villages and not Aged Care facilities, a point of confusion amongst many forms of subsequent commentary on the matter. There is a vast difference in the accommodation and fee structure between the two and financial issues with placements into aged care facilities are a separate issue altogether which require a different discussion.
A fact which the televised investigation failed to mention was that Aveo retirement villages can actually provide (comparatively) a very affordable retirement-village experience during the period of occupancy. It is the costs involved in exiting these communities which has been the chief trigger for many cases of newsworthy financial distress. Legislation does not actually permit profits to be made during the period of occupancy by the retiree, so accounts of exorbitant monthly service fees (in some cases up to $2,000 per month) cannot actually be pinned on managing organisations such as Aveo. It is upon departure of these retirement villages that companies are lawfully granted an opportunity to accrue financial benefit and yes, the fees on paper are outrageous to look at.
It is for this reason our financial advisers specialising in aged care stress the importance of:
· a thorough discussion with children or other close family members about these post-retirement decisions;
· engaging a lawyer to thoroughly peruse the novella-style fine-print documents commonly attached to these contracts; and
· Also the benefits of sitting with a knowledgeable adviser to clearly explain financial implications of any future changes in circumstance.
These recommendations can help prevent any financial shocks to you or your family should your occupancy come to an end, and help you make an informed decision before contracts are signed.
The Minister for Aged Care, Ken Wyatt, has described the industry as an “exploitation of residents” with over-complex contracts, misleading marketing and massive fees.
While we are not here to defend retirement villages and we really can’t remark on accusations such as ‘misleading marketing’, we have reviewed a large number of contracts over the years and were not surprised by the fees discussed in the Four Corners report.
Our emphasis would always be, do not sign anything without reading it (despite pressures that might occur at the time) and if you have queries or do have concerns over your understanding of the documents, seek expert advice. This advice can save you a great deal of money in the longer term and also ensures you understand exactly what you are signing up for.
There are 3.5 million Australians over the age of 65 and we are living longer. Retirement villages will be a consideration for many and should definitely be perceived as a lifestyle choice rather than an investment decision. Advice and education can play a big part in ensuring hard earned savings are used as efficiently as possible and traps avoided.
Whilst we specialise in Aged Care placement we also have advisers who can help you navigate the move into retirement villages as painlessly as possible.
Call us on 07 55 757 689 or email your queries to firstname.lastname@example.org