Openness needed on charges

Retirement villages seek a marketing edge by offering residential care facilities as well as ordinary retirement apartments.

But residents of retirement villages shifting into on-site rest home care could find themselves faced with extra charges, a report from the Commission for Financial Capability said.

The Retirement Villages Monitoring Report recommended a change to the legal code covering retirement villages to force them to do more to inform prospective residents of the extra charges they could face to get access to ‘‘premium’’ residential care rooms, as opposed to ‘‘standard’’ rooms they may not like.

Almost 70 per cent of retirement villages have ‘‘colocated’’ rest home care offering what they call a ‘‘continuum of care’’.

This was comforting to prospective residents who knew if they ever needed to go into rest home care, the move they would have to make was a very short one indeed.

But, said Troy Churton, the commission’s retirement village expert, the rest home model that had emerged was one offering a choice of standard and premium rooms.

Residents had to pay extra from their own pockets for premium rooms, and government residential care subsidies generally covered the charges for standard rooms.

But people entering retirement villages weren’t always getting clear information on the financial fishhooks of later moving into a residential care bed.

The report recommended 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.

‘‘The thing I have been advocating is any elderly person considering their future retirement accommodation options does need to consider the ‘What if I needed care’ question,’’ Churton said.

‘‘In particular, if they are attracted to a retirement village, they want to find out as much as possible about access to aged care at the same time they are making a decision to go into a retirement village.’’

Retirees thinking of buying into a retirement village should get full information on the terms of transfer to a rest home later before they buy, warns Troy Churton of Commission for Financial Capability.