Retirement Villages Amendment (Information Disclosure) Bill 2012 (05.02.2013)

Written on the 19 February 2013

I too am pleased to speak on the Retirement Villages Amendment (Information Disclosure) Bill 2012. As various members have mentioned, the ageing of the population is an issue affecting all levels of government.

 

I am pleased to say that last year the Family and Community Development Committee undertook an inquiry into opportunities for participation of Victorian seniors. In the report of that inquiry this issue of retirement villages was raised, as were the very profound effects of an ageing population and how we as governments need to be handling that. Mrs Kronberg said there was a great wave of consumers coming through and potentially needing retirement villages, and Mr Eideh has just referred to the ageing population. The report states:

 

'Population ageing is a global pattern that Victoria is experiencing alongside other states and nations.' 

 

It goes on to say:

 

'People in Victoria are living longer than ever before. In the early 20th century, people only expected to live till their mid-50s. By the early 1970s, people were likely to live until their mid-70s. In 2012, Victorians can generally expect to live into their mid-80s.'

 


Victorians who retire in their early 60s can expect to live in retirement for over 20 years ...


We are seeing a whole cohort of people who are potentially going to be entering retirement villages and, as members on both sides of the house have raised, this is an important aspect for many people who are undertaking significant decisions with their families. Mr O'Brien, the Minister for Consumer Affairs, should be commended for understanding that this is a real issue for many who are currently tenants and residents of retirement villages and some people who are entering potential retirement village situations.

 

I am pleased representatives of Consumer Affairs Victoria went out and spoke to various stakeholders. The Consumer Action Law Centre paper states under the heading 'General remarks on current problems with regulation of retirement accommodation':

 

As noted by the discussion paper, retirement village contracts can be long and complex. As well as limiting the ability of residents to understand their rights and obligations, this restricts the ability of prospective residents to compare products offered by different providers and so may stifle competition. Current disclosure requirements in the Retirement Villages Act do not adequately assist consumers to understand products on offer or compare competing products.
As I said, the minister should be commended for fulfilling this commitment that was identified when we were in opposition.

 

It is another area where the Baillieu government is endeavouring to improve the lives of many Victorians, especially in their senior years, and for their families who might be confused or unable to understand the complexities of the contracts they are entering into, whether going into or exiting retirement homes.

 

As most members have indicated, the technical aspects of this bill have been gone through. The bill will make amendments to the Retirement Villages Act 1986 in order to require operators of retirement villages to give prospective clients a prescribed fact sheet as well as the right to inspect certain prescribed documents held by an operator before a contract to enter the retirement village is entered into. This is an important aspect of the legislation that underpins this issue, and it will provide more certainty and clarity for people entering retirement villages, particularly in their later years when this is sometimes a very big decision.

 

Some will embrace going into a retirement village with great enthusiasm and look forward to entering that new sphere in their life. For others it could be quite daunting, and this legislation will help to remove any complexity or confusion in marketing material or fact sheets that might be provided and ensure those people have greater certainty.

 

I am pleased, along with my colleagues, to commend the bill to the house, and I again commend the minister for taking this issue up in opposition and following through in government to ensure this piece of legislation will get through.

 

Ms DARVENIZA (Northern Victoria) -- I am pleased to rise and make a few comments on the Retirement Villages Amendment (Information Disclosure) Bill 2012. I am always happy to speak on legislation that is going to do more to protect our seniors.

 

After all, our population is getting older, and in the future more of us will be looking at the option of a retirement village, so the more information we have the better we are able to understand the contracts and the payment schedules and we will be in a much better position to make an informed decision. We will not only be able to make an informed decision but actually make a decision about going into a retirement village.

 

Most of us think that what we would like to do is stay in our own home and be able to age at home, and for many people that is a very real option -- with the right sort of support they are able to do that -- but for a lot of people a retirement village is an option and a place where they are able to do that ageing.

 

The retirement village becomes their new home and they are able to stay there and be as independent as possible for perhaps a much longer time than they would otherwise have been able to do if they had stayed in their family home where there were steps, bathrooms that did not have rails, baths and the other obstacles of an everyday family home that are difficult for an aged person to negotiate. Retirement villages are purpose-built facilities that mean these obstacles no longer exist and it is much easier for people as they age to be able to get around and live their lives very independently for longer.

 

Usually the people who make the decision to go into a retirement village fall into two groups. There are those of us who plan very early in our lives for our future. Before there is any major catastrophe we make a decision that we will move into a retirement village and take advantage of the facilities and support it has to offer.

 

We might not need a lot of that support when we first move in, but we know that as we age we will need more support and it will be there at our doorstep. Some of us have the foresight to do that.

 

What we want to do and what this legislation does -- and this is why I am pleased to speak on it -- is provide

 

people with all the facts and information, which makes it easier for people to make a decision earlier. The complexity will not be a barrier. Sometimes I think people would like to take the step and move into a retirement village, but because of the complexity of the contracts, the various modes by which you can enter a retirement village and the various ways that you pay for it, including ongoing payments, it all becomes a bit much, so they put it off. The complexity is a barrier, so having the fact sheets and providing the information that this bill requires will perhaps make it that much easier for people to plan to move into a retirement village.

 


Another group that enters into a retirement village involves those affected by a disaster -- for example, when a spouse dies; when there is either a terminal illness or chronic illness that becomes more difficult to manage; or when there is a fall involving broken bones, resulting in rehabilitation and the person not having the same sort of mobility.

 

A disaster of some sort strikes the family or the spouse, so these decisions have to be made at a time of absolute distress, when people are least able to be making decisions about downsizing their house, packing up and deciding what they want to keep and what they do not want to keep. The sorts of complexities around the contract and the payments just add to the angst, anxiety and trauma that that group experiences. Although I have no proof of this, I think we often wait until disaster strikes before we make those decisions.

 

Having this sort of information available to us is really important in both the situations I referred to. We will make it easier for those who want to plan ahead so that they can get ready by putting their house and their lives in order. We will not put obstacles in their way. It will be easier for those who are faced with dealing with some other major trauma in their lives.

 

I will briefly run through some of the complexities around contracts for retirement villages. A number of different contractual arrangements can be offered, even within the same retirement village. This is what people are dealing with. The most common types of contracts for retirement villages are strata titles. They can be long-term leases or licences. They can be a company title, a unit trust or a periodic tenancy. Those moving into a retirement village face very different contractual arrangements.

 

The fees and charges are quite different too. There are different types of fees and charges that may be payable when a person is entering a retirement village. There are fees to join and even fees to join a waiting list for a retirement village. There are incoming contributions. There are maintenance charges. There are deferred management fees. There can be owner-corporation fees, recurrent charges for assisted living or personal services and charges for metered services and insurance.

 

Ongoing contributions might be required when you go into the village, and they can often be the largest single payment a resident makes to secure the right to actually occupy the premises. Of course a resident may face substantial costs when they leave the village, and there may be fees as part of the purchase price of the unit which are deferred until the end of the occupancy -- they are departure fees, if you like.

 

There are issues even if you are just looking at which retirement village to go into and what options you have. After all, people generally look for a retirement village that is close to where there have lived or close to where their families live, close to the shops they know, close to the hospitals they attend, close to the doctors they see and close to where their friends are. You are making decisions about which area you are going to look in based on these personal criteria in addition to what looks nice and what services are offered.

 

It is very confusing and complicated to then compare and contrast the different contractual arrangements and the different fee structures of different properties.

 

The bill we have before us today will create two basic requirements: that a fact sheet be provided to those who are considering a retirement village and that a set of prescribed documents be provided before signing a retirement village contract. That is certainly welcomed, and I am sure that it will be very helpful to people who are making an important decision about a major move in their lives, a move to a place where they are going to be spending, hopefully, a considerable time.

 

However, provided that the retiree has at some point seen a fact sheet and inspected the prescribed documents, providers have met their duties under this bill.

 

It seems highly unlikely that any village owner will be able to be prosecuted under these laws, given that the retiree simply has to be given a fact sheet and be provided with the documents at some stage. As Mr Scheffer pointed out, from a legal perspective there are generally very few people available to give advice during this important decision-making process. However, this legislation is certainly a step in the right direction, and I am sure that many people will find it very helpful. As members of Parliament we need to ensure that members of our ageing population have as few obstacles as possible in the way of their making choices so that they have the best support and the best care in their senior years.


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