More Help For Consumers Around Retirement Village Rules
From 1 April two new sets of guidelines will help prospective residents of retirement villages and their families be clear about the financial implications of moving into a village, and transferring between independent living and care facilities on the same site.
The Commission for Financial Capability (CFFC) worked with the Retirement Villages Association (RVA) in drawing up a Summary of Key Terms. This clarifies the cost of moving into and living in a village, whether there is any share of capital gain or risk of capital loss, and when the resident’s capital will be repaid after vacating the unit.
The two organisations have also produced a Transfer to Care checklist for operators to go through with prospective residents before they sign a village contract. The checklist covers whether a village includes a care facility on site, the rights of the resident to enter the care facility if need be, the assessment process required before entry, and the costs associated with living there.
CFFC, which monitors the retirement village industry, found in its annual Monitoring Report last year that disclosure could be improved, particularly in relation to a resident’s ability to move to a care facility.
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. However few people understand that the independent living part of a village and its care facility operate under different regulatory regimes and different cost structures.
Independent living is regulated by the Retirement Villages Act and monitored by the Retirement Commissioner (CFFC); care facilities are monitored by the local DHB and 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 the CFFC’s Troy Churton.
The process for moving into care can be complex, and the resident may face extra charges.
Churton said CFFC was pleased there would now be better disclosure for prospective residents and their families to help them make the decision about moving into a retirement village, and if so, which village best met their needs.
“This is a life-changing decision, often made at a stressful time. These guidelines will help consumers be clear about the implications, both financial and regarding the process of moving into greater care if they need to in the future.”
The Executive Director of the RVA, John Collyns, said the two sets of guidelines raised the bar for members to display effective self-management.
“Use of both sets of guidelines is now a mandatory condition of membership and will be part of each member’s three year compliance audit,” said Collyns.