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Retirement village watchdog demands greater clarity

Retirement village watchdog demands greater clarity from operators

The government agency tasked with monitoring the retirement village industry is demanding greater clarity from operators regarding the rules and costs involved in residents moving from independent living to rest home-type care facilities on the same site.

In its annual Retirement Village Monitoring Report, the Commission for Financial Capability (CFFC), has taken aim at the confusing contracts presented to intending residents and their families.

“They are so complicated we found that even some lawyers who work in the field could not understand them,” says CFFC’s National Manager of Retirement Villages, Troy Churton.

The retirement village industry is growing rapidly as the population ages, and villages increasingly include care facilities so they can market themselves as providing a “continuum of care”. More than 70% of villages now have care facilities on site, and more than 50% of New Zealand’s care beds are on retirement villages sites.

But few intending residents understand that the independent living part of a village and the care facility operate under different regulatory regimes and different cost structures.

The independent living side is regulated by the Retirement Villages Act and monitored by the Retirement Commissioner; care facilities come under the auspices of district health boards and are monitored by the Health & Disability Commissioner.



“A person who buys a license to occupy an independent living unit in a village may think they can move easily into the care facility on site should they need to, but that’s not necessarily the case,” says Churton.

The process for moving into care is complex, and the resident may face extra charges.

“We believe retirement village operators are not explaining this clearly enough in their marketing and in the contracts they offer to intending residents,” says Churton. “There needs to be better disclosure in the marketing and documents that tells consumers really clearly that if they’re going to need care in the future, there are different pathways by which they may access that care, each with different cost implications.”

Churton’s report recommends formal changes to the Retirement Village Code of Practice to require retirement village operators to provide greater clarity for people considering moving into one, and to simplify the jargon that could confuse both prospective retirement village residents and their lawyers.

“Every intending resident has to have independent legal advice on the documents they are about to sign. We stress how important it is to look at the terms of transfer between the village and the care facility.”

Churton’s report has been submitted to the Minister responsible for retirement villages, Hon. Phil Twyford. (Ed’s note: responsibility for the retirement villages portfolio may be moving to new housing minister Megan Woods, to be confirmed).

In the meantime, consumers can visit cffc.org.nz for more information, or ring Seniorline on 0800 725 463. Churton advises intending residents to ask the operator of the village they’re considering moving into about the processes for transferring to its care facility, and the different cost implications.

ends

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