An update on Retirement Living Legislation
Retirement Villages should be places where residents feel that they are treated fairly, with respect and are entitled to have their voices heard. This is far too often not the case, particularly here in Queensland.
As the Member for Buderim and the Queensland Leader of One Nation, I recently hosted a forum dedicated to this important subject, following years of hollow promises and inadequate, drawn-out procedures undertaken by successive governments to overhaul and review serious flaws in Retirement Village Act legislation.
With the venue filled to overflowing, the attendance of some 210 residents that morning clearly demonstrated the level of concern around this sensitive area of law and the apparent concern, frustration, bewilderment and quest for justice, expressed by many Retirement Village residents and others considering this lifestyle.
Retirement Village living is promoted as a ‘rainbow’s end’ package to seniors seeking to purchase what is likely to be their final residence. It requires the surrender of equity accumulated across an individual’s working life to scheme operators—in return for the promise of a secure, safe and economically viable life-plan moving forward into old age.
In August this year, the Queensland Labor government introduced into parliament the long-awaited Housing Legislation (Building Better Futures) Amendment Bill.
At the time, Minister de Brenni stated:
“This Bill will introduce a regime of fairness to the retirement living sector in Queensland, making Queensland the national leader in consumer protection for older Australians.”
Sadly, this does not appear to be the case. The amendments in the revised Bill scratch only the surface of a number of critical failings in Retirement Village legislation.
Failings of the Amendment Bill:
The feedback I have gained during and since the forum confirms my own belief that many areas of weakness and exposure for residents still remain and MUST be addressed.
The examples below provide illustration:–
Failure to simplify contracts:
A ‘standard form contract’ whilst being ‘standard’ will not always apply to all types of scheme in their entirety. It is simply not just a case of ‘one size fits all’. Contracts should include scope for agreed variations.
Exit fees—Not adequately regulated:
Currently, contracts allow for the bleeding out of equity over time with ‘exit fees’ ranging from 25% after 8 years up to 35% after only 3 years. I have even personally witnessed one which states ‘You will not participate in any capital gain, but will participate in capital loss’. I have noted from the public hearing held on 13 September that one scheme operator made reference to a contract as having a 40% exit fee after only 2 years residence.
Misinformation at point of sale—Not adequately regulated:
Sales personnel must not inform prospective residents that fee increases are linked to the Consumer Price Index (CPI) because some elements of the fees (Section 107) are not capped and fees go up by more than pensions. Items that are not capped include:
- Rates, taxes or charges levied under an Act
- Salaries or wages payable under an Award
- Insurance premiums or excesses
General services charge payable by residents—Not adequately regulated:
This is payable by residents and is to be decided by the scheme operator. Under certain circumstances, an increase to the general services charge can be over and above CPI.
Dilution of non-contract services:
The Bill fails to address this issue. I am told that people enter into contracts with scheme operators on the basis that certain services shown in marketing material to attract prospective residents will be included—such as an in-house handyman or registered nurse medical care. Currently, such services can be withdrawn without explanation with scheme operators justifying their actions by claiming such provision is not specifically mentioned in the contract.
Mandatory buy-back period—Too lengthy:
The mandatory buy-back period should be reduced from 18 months to 9 months or less with retrospective effect.
Evidence to the Public Works and Utilities Committee:
The parliamentary Public Works and Utilities Committee heard the following evidence:
“If the government truly intends to shift the balance of power in these industries then significant changes are needed to challenge the status quo, which still favours operators’ profits over the needs of vulnerable residents. Further reform is needed to abolish exit fee charges and shorten the time frame for payout of exit entitlements, make it mandatory to obtain legal and financial advice before residents enter into retirement village contracts and introduce significant penalties for operators’ non-compliance with behavioural standards.”
It remains to be seen whether Labor and the LNP will even be able to reach a consensus on passing the Bill.
All this uncertainty as we head into an election.
Where does this leave residents?
What you have told me over the past weeks about this Bill confirms that it does not offer any genuine, watertight support to the people of retirement living communities.
One of the most complained about issues I hear of is the complexity of retirement living legislation.
As retirement living communities are operated and regulated under state legislation, a state-based, industry-funded Ombudsman is what is needed, to begin with.
As your local member for Buderim and Queensland Leader of One Nation, I will not be supporting this legislation in its current form through the parliament.
If One Nation holds the balance of power in government following the election, a less convoluted Bill will be introduced into parliament within the first 100 days to address the failings of this Bill and current legislation.
By putting ‘people before politics’, I commit to ensuring that you will get a fair deal in retirement living.