Ministers crack down on shady retirement village practices
- Replies 13
The promise of a peaceful and secure retirement is what draws many older Australians to the idea of living in a retirement village.
However, recent investigations have uncovered a darker side to this seemingly serene option, with tales of 'corporatised elder abuse' emerging, characterised by exorbitant fees, oppressive contracts, and deceptive marketing tactics.
This has prompted a national outcry and a firm response from government officials.
Federal Financial Services Minister Stephen Jones has announced that state consumer ministers will convene to address the unsavoury practices of some retirement village operators.
The urgency of this issue is underscored by the distressing stories of elderly Australians who find themselves financially trapped due to the complex and often predatory nature of retirement village contracts.
‘There clearly needs to be a meaningful uplift in the conduct of retirement village operators,’ Jones said.
‘This issue will be on the agenda for the upcoming consumer ministers meeting, and I have made it clear to state and territory ministers poor behaviour needs to be stamped out.’
The ABC's investigation into the multi-billion-dollar retirement village sector has shone a light on the plight of residents like 89-year-old Joan Green.
After living in a retirement village for over a decade, which cost $384,000, she discovered that a staggering 60 per cent exit fee, along with other charges, would leave her with a fraction of her unit's original value, or $81,000, making it impossible to afford necessary aged care.
This is not an isolated incident. The ABC has been inundated with messages from residents and their families, painting a grim picture of financial entrapment and emotional distress.
Some report bullying and intimidation by village staff, while others are shocked by the government's apparent sanctioning of such practices.
In response to these alarming reports, crossbench MP Rebekha Sharkie has been a vocal advocate for change.
She has called for retirement villages to be classified as complex financial products, which would place them under the scrutiny of the federal corporate regulator, the Australian Securities and Investments Commission (ASIC).
This move would mark a significant shift from the current classification, which dates back to the 1980s and views retirement villages as real estate rather than investments.
In a series of letters, Sharkie requested to include in their meeting of improving ‘national consistency and protections’ and working towards a more transparent and consistent sector.
Sharkie mentioned that ever since she spoke out, her office had been receiving several emails.
Residents shared a range of experiences regarding retirement villages, highlighting both challenges and satisfaction.
One woman, who moved into a retirement village in 2021, reported facing health issues due to alleged bullying and intimidation by staff and management.
‘We have had issues with the condition of our villa, maintenance, inappropriate bullying comments from the manager and intimidating behaviour by the maintenance officer,’ she said.
A grieving family managing their late mother’s estate accused the operator of exploitation.
‘I couldn't believe how the government lets this kind of thing happen, and it's legal,’ a family member said.
Among the hundreds of emails received, a few reflected positive experiences. These residents affirmed their awareness of the contracts and their satisfaction with their choices.
‘We moved into our village earlier this year and are very happy, notwithstanding the 40 per cent exit fee that is part of our plan,’ one resident noted.
Another remarked, ‘There will always be people who claim to not have known about the exit fees. There will always be people who complain about the conditions of living in a village community. There will always be people who complain about perceived restrictions of living in the village community.’
The push for reform has gained momentum, with states like Victoria, South Australia, and Western Australia introducing stronger protections for residents.
Victoria has taken the lead by mandating a code of conduct for operators and standardising contracts to enhance transparency.
Despite these positive steps, experts and advocates argue that more comprehensive national reform is needed.
Fiona York from the Housing for the Aged Action Group has criticised the current model of exit fees as fundamentally flawed, trapping residents and incentivising operators to prioritise profits over the well-being of their residents.
The Retirement Living Council (RLC) has attempted to self-regulate with a voluntary code of conduct, but its impact has been limited, with less than half the industry signing up and no breaches enforced against operators.
State consumer ministers were approached with questions regarding their positions on retirement villages and potential protections, including whether establishing an ombudsman or reclassifying retirement villages as complex financial products under the Australian Securities and Investments Commission (ASIC) was on the agenda.
Since 2007, federal and state inquiries into retirement villages have revealed questionable practices and prompted calls for reform.
Despite minor adjustments, significant changes have yet to materialise. Residents, experts, and advocates continue to push for meaningful national reform.
Have you or someone you know experienced issues with a retirement village? Share your stories with us in the comments below.
However, recent investigations have uncovered a darker side to this seemingly serene option, with tales of 'corporatised elder abuse' emerging, characterised by exorbitant fees, oppressive contracts, and deceptive marketing tactics.
This has prompted a national outcry and a firm response from government officials.
Federal Financial Services Minister Stephen Jones has announced that state consumer ministers will convene to address the unsavoury practices of some retirement village operators.
The urgency of this issue is underscored by the distressing stories of elderly Australians who find themselves financially trapped due to the complex and often predatory nature of retirement village contracts.
Ministers have met to combat the retirement village practices made by its operators. Credit: Shutterstock
‘There clearly needs to be a meaningful uplift in the conduct of retirement village operators,’ Jones said.
‘This issue will be on the agenda for the upcoming consumer ministers meeting, and I have made it clear to state and territory ministers poor behaviour needs to be stamped out.’
The ABC's investigation into the multi-billion-dollar retirement village sector has shone a light on the plight of residents like 89-year-old Joan Green.
After living in a retirement village for over a decade, which cost $384,000, she discovered that a staggering 60 per cent exit fee, along with other charges, would leave her with a fraction of her unit's original value, or $81,000, making it impossible to afford necessary aged care.
This is not an isolated incident. The ABC has been inundated with messages from residents and their families, painting a grim picture of financial entrapment and emotional distress.
Some report bullying and intimidation by village staff, while others are shocked by the government's apparent sanctioning of such practices.
Some residents reported cases of bullying and intimidation by village staff. Credit: joyce huis / Unsplash
In response to these alarming reports, crossbench MP Rebekha Sharkie has been a vocal advocate for change.
She has called for retirement villages to be classified as complex financial products, which would place them under the scrutiny of the federal corporate regulator, the Australian Securities and Investments Commission (ASIC).
This move would mark a significant shift from the current classification, which dates back to the 1980s and views retirement villages as real estate rather than investments.
In a series of letters, Sharkie requested to include in their meeting of improving ‘national consistency and protections’ and working towards a more transparent and consistent sector.
Sharkie mentioned that ever since she spoke out, her office had been receiving several emails.
Residents shared a range of experiences regarding retirement villages, highlighting both challenges and satisfaction.
One woman, who moved into a retirement village in 2021, reported facing health issues due to alleged bullying and intimidation by staff and management.
‘We have had issues with the condition of our villa, maintenance, inappropriate bullying comments from the manager and intimidating behaviour by the maintenance officer,’ she said.
A grieving family managing their late mother’s estate accused the operator of exploitation.
‘I couldn't believe how the government lets this kind of thing happen, and it's legal,’ a family member said.
Among the hundreds of emails received, a few reflected positive experiences. These residents affirmed their awareness of the contracts and their satisfaction with their choices.
‘We moved into our village earlier this year and are very happy, notwithstanding the 40 per cent exit fee that is part of our plan,’ one resident noted.
Another remarked, ‘There will always be people who claim to not have known about the exit fees. There will always be people who complain about the conditions of living in a village community. There will always be people who complain about perceived restrictions of living in the village community.’
The push for reform has gained momentum, with states like Victoria, South Australia, and Western Australia introducing stronger protections for residents.
Victoria has taken the lead by mandating a code of conduct for operators and standardising contracts to enhance transparency.
Despite these positive steps, experts and advocates argue that more comprehensive national reform is needed.
Fiona York from the Housing for the Aged Action Group has criticised the current model of exit fees as fundamentally flawed, trapping residents and incentivising operators to prioritise profits over the well-being of their residents.
The Retirement Living Council (RLC) has attempted to self-regulate with a voluntary code of conduct, but its impact has been limited, with less than half the industry signing up and no breaches enforced against operators.
State consumer ministers were approached with questions regarding their positions on retirement villages and potential protections, including whether establishing an ombudsman or reclassifying retirement villages as complex financial products under the Australian Securities and Investments Commission (ASIC) was on the agenda.
Since 2007, federal and state inquiries into retirement villages have revealed questionable practices and prompted calls for reform.
Despite minor adjustments, significant changes have yet to materialise. Residents, experts, and advocates continue to push for meaningful national reform.
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