Last night’s explosive 7.30 report that aired on ABC TV and ABC iView has blown the lid off the financial exploitation that is rampant in Australia’s retirement villages.
The investigation, conducted by 7.30 and ABC Investigations, reveals the disturbing truth behind an industry that promises seniors a secure, serene lifestyle but often leaves them financially devastated.
The report exposed how hundreds of elderly Australians have found themselves trapped in costly and complex contracts, facing exorbitant exit fees, refurbishment costs, and ongoing financial burdens even after leaving their retirement village.
Families are speaking out, describing the system as one that unfairly benefits operators, leading to financial ruin for some of the country’s most vulnerable residents.
As the revelations unfold, the report raises serious questions about the ethics of retirement village operators and puts a spotlight on the urgent need for reform in a rapidly growing industry.
Despite their popularity, retirement villages operate in a space with relatively little regulatory oversight, allowing the industry to flourish with minimal intervention from state or federal governments.
Retired actuary and academic Tim Kyng has gone as far as to describe the financial practices of some retirement village operators as “cunningly designed rip-offs.” Federal MP Rebekha Sharkie has similarly condemned the sector, labelling it a form of elder abuse driven by corporate greed.
Many families have shared harrowing stories about their experience with retirement villages, describing the financial impact as devastating. One such case is that of Joan Green, an 89-year-old resident of Tranquil Waters retirement village in Queensland.
After purchasing her unit 11 years ago for $384,000, Joan will only receive $81,000 after a slew of exit fees and refurbishment costs are deducted. Her family now faces the difficult reality that her remaining funds will not be enough to cover the cost of aged care.
“It’s like robbery,” said Joan, echoing the sentiments of countless others who have found themselves trapped in financially draining contracts. “You get to 89, and you’ve lost your life savings.”
The crux of the issue for many is the lack of transparency in contracts and the hidden costs that only come to light when residents leave or pass away. Central to these disputes are the exorbitant exit fees and refurbishment costs charged by operators.
These fees can be based on a percentage of the unit’s sale price, often escalating with time, and can leave residents with a fraction of their original investment.
At Tranquil Waters, Joan Green’s contract stipulates an exit fee of 60 per cent of the unit’s sale price. In addition to this, her family is expected to cover refurbishment costs amounting to $20,000, along with other administrative and sales fees. This brings Joan’s total losses to around $300,000—a staggering 80 per cent of her initial investment.
If Joan had purchased a standard home in the same area, her investment would have more than doubled in value over the same period, according to property analysts. However, her retirement village contract has left her financially stranded, with little chance of recovery.
It’s not just exit fees that have come under fire. Many families have been hit with steep refurbishment costs, which can seem completely disproportionate to the actual state of the property.
Lynette Anderson, whose mother Ruth lived at a Living Choice retirement village in Queensland, was horrified to receive a quote for $167,000 in refurbishment costs after her mother moved into aged care. The list of required repairs and replacements included everything from new tiles and carpets to bathroom renovations and even a new clothesline.
“They gutted the place,” said Lynette, expressing disbelief at the extent of the refurbishment demanded by the village. “Mum was just one lady living in a small, two-bedroom house—how did all of this need changing?”
Like many others, Ruth’s contract also included an exit fee, amounting to 35 per cent of the sale price, plus additional sales costs. After all the deductions, Ruth was left with just $257,962—a significant reduction from the $564,950 she initially paid.
With the ageing population in Australia expected to rise dramatically in the coming decades, the retirement village industry is positioning itself as a solution to both the housing affordability crisis and the need for age-friendly living arrangements. However, these financial pitfalls have prompted calls for reform.
Centre Alliance MP Rebekha Sharkie has been one of the most vocal advocates for change. Her electorate, Mayo, is home to a large population of retirees, many of whom have faced financial ruin after moving into retirement villages.
Sharkie has called for tighter regulations and greater transparency within the sector, urging the government to take action to protect vulnerable Australians from exploitative practices.
Some states have introduced limits on how long maintenance fees can be charged after a resident leaves, but these reforms do little to address the broader issues of contract complexity and financial loss.
As awareness grows around the financial traps within retirement villages, it’s clear that greater oversight and accountability are needed. Operators must be held to higher standards of transparency and fairness, ensuring that elderly Australians are not left financially devastated after years of hard work and saving.
Until these reforms take place, potential residents and their families should approach retirement village contracts with caution, seeking thorough legal advice and carefully scrutinising every clause. For many, the dream of an idyllic retirement could quickly become a financial nightmare.
I have been lobbying state and federal governments to get The Retirement Villages Act totally changed to protect us better, but no one is brave enough. Do you know that we, seniors in these villages are of no interest or protection by Minister for seniors, or local councils, and that Advocacy organisations cannot assist us? We are alone, except for one organisation that can, in limited cases, represent us. We don’t get Centrelink rent assistance in some States and in other states it is only for some people with certain contracts? Not only we lose most of the money that we pay for when we buy our last home(but not the land in which it stands), we then pay high monthly fees by dwelling, NOT by number of people who live in the home, and so on. (Water rates are included in this and you can imagine the different consumption between one or three occupants)The Retirement Villages Act is old and should be updated, to protect the residents better. Rental assistance should be given to All seniors on age pension. I urge the government to step in and act to protect us Seniors.
Agree. Add to this. We do not own the land so cannot take advantage of the government equity losns ( I did take this to MP ). We cannot reverse mortgage. So no opportunity to improve life while living. all funds tied up in home and will lose so much of it.
Also we pay rates and cannot get rent assistance.
Despite monthly fee.
All this needs to be looked at abc radically changed.
Imagine how this information is affecting those who have already made this decision in good faith and are now dealing with anxiety re their future. As you age your ability to deal with added anxiety diminishes – I’m watching those in my independent living units, who believed they had made wise decisions for their future, now deal with fear and depression.
Let’s not forget the monthly management fees. I pay $730 a month which is a big slice out of the pension. And in NSW no rental assistance is given for retirement villages though they do give rental assistance to pensioner in caravan parks.
My Father in Law is in the same predicament. He feels trapped living in CLASSIC RESIDENCES BRIGHTON EAST, VIC. He wanted to leave as he will be needing more help with his care after so many falls. The management told him that before he can sell the place which he bought for more than 500k, he needed to ripped off the tiles and pay for the renovations which will be taken out of the total sale. In the end, he will be left with just under 200k. Sadly, not enough if he goes to an Aged Care. He was a Vet who served his country and worked hard all his life, never got a cent from Centrelink and believe in a fair-go. He feels helpless, hopeless and it’s sad to see him that way. He is a proud man. It seems these operators all across Australia speak of the same language-unscrupulous HIDDEN clauses (if any) in the contract aimed at milking every cents these “SILENT GENERATION” have. Please do something about this issue. It has been going on for a long time and though parts of the Aged Care sector has been looking optimistic, this branch of the same sector has fallen through the cracks.
I watched this program last night & was thoroughly digusted, it just shows how the elderly are being treated. I’m on my way to getting old & sure hating it. 😞😞
I am a pensioner that my eldest took my house and has to live in a small unit of benevolent society in Little Bay , Sydney.
I am living here for a year and I have nearly no cloths left. They were stoolen by neighbours and one cleaner. My food also suffer the same fate. My electrical are for their use. They have spare keys and they just break in when I have to go out.
I have lived in2 retirement villages 12 months first one
Attacked by neighbours dog 4 times.complained to council
After she was fined nothing done by management attacked again called police. Nothing done So left only way of peace. But lost $100 ooo.
Moved into another abusedby manager. Constantly.Asked to move from bedsitter but after 6mnths was told only way wasto vacate..they would only put on the market vacant. To make matters worse I was scammed $125.ooo had no money other than pension
Im 83 yrsold the only people to help was Salvos.
Because I stayed at motel tillthe village paid me out 6 mnths later minus feesfor 3 mnths and
$47.ooo I approached fair trading mp gordon reid gosford and other ministers
Catherine Griner is away of the situation going on foryears I have proof of lots of discrepancies of retirement
Operations bulling etc
100
Why on earth do people not get legal advice before moving into these Lego-lands? The advertising is just not real.
Same things happened to my brother who lived in Cameron Close in Surrey Hills/Burwood (Stockland). They gutted the unit to the tune of $80k.
Took ages to sell – big joke to them.
I want an answer to a question: where do they put/sell/relocate all the perfectly good white goods they remove from the units? Even the perfectly functional fittings they insist on replacing?
I wonder if they auction them all off to add to their profits? They certainly know how to make money out of vulnerable people.
Yes I agree. Southport Gardens is a death trap with no way out but a grave. Sad.