Earlier this week, the ABC’s 7.30 program aired an investigative report highlighting concerns from retirement village residents and their families about financial exploitation within the retirement living sector.
The report, which revealed hidden exit fees, refurbishment costs, and opaque contracts, has drawn criticism from both residents and experts.
However, The Retirement Living Council (RLC), the peak body representing the industry, has provided a different perspective on the issue. Daniel Gannon, Executive Director of the RLC, responded to the claims, emphasising the industry’s commitment to transparency, fairness, and improving the experience of the 250,000 Australians living in retirement communities.
Concerns Raised in the ABC Report
The ABC’s investigation exposed grievances from elderly Australians, many of whom claim they have been financially devastated by the complex contracts and hidden fees associated with retirement villages. Residents like Joan Green and Ruth Anderson found themselves facing exorbitant exit fees and excessive refurbishment costs, leaving them with only a fraction of their original investments.
The program also featured Federal MP Rebekha Sharkie, a vocal advocate for reform in the retirement living sector, who reiterated her calls for tighter regulations. Sharkie compared the financial practices of some retirement village operators to elder abuse, describing the situation as a system heavily skewed in favour of corporate profits.
Retirement Living Council View
While the ABC report painted a bleak picture of the sector, Daniel Gannon expressed disappointment in the portrayal of retirement villages and sought to correct what he considers to be an overly negative perception of the industry.
According to Gannon, most residents have positive experiences in retirement communities, and the issues raised are not representative of the industry as a whole.
“While it is disappointing and disheartening to hear stories of resident expectations not being met, the RLC does not believe these issues are systemic across the retirement living sector,” said Gannon. “Industry continues to work hard to ensure that 250,000 retirement village residents across the country have the wonderful experience they deserve, which is generally the case.”
Gannon also emphasised that retirement village homes should not be viewed as investment properties. Instead, they are intended as a lifestyle choice, with benefits that go beyond financial returns.
“It is important to remember that homes in retirement communities are not investment properties, nor are they a vehicle for generating wealth – they are a lifestyle choice,” Gannon said.
Contrary to the claim that the sector is minimally regulated, the RLC stressed that retirement villages operate under strict state and territory legislation, with some communities also governed by the federal Aged Care Act. These regulations, according to Gannon, are regularly reviewed to ensure they remain fit for purpose.
“The retirement living sector – and its financial options – are heavily regulated by state and territory legislation, while some communities are also governed by the federal Aged Care Act,” Gannon explained. “These acts are consistently reviewed by governments and are typically reviewed every five years – and appropriately so.”
Gannon reassured that the industry has been working closely with governments to simplify contracts and improve transparency, with the goal of increasing consumer confidence.
“Throughout these reforms, industry continues to be motivated by a desire to increase consumer confidence, raise standards, and pursue better regulation and transparency. We have worked with governments in recent years to inject more certainty, clarity and transparency into contractual processes because we want simpler contracts.”
In response to the stories of financial hardship shared by residents, Gannon affirmed that the sector is committed to meeting the expectations of all its residents, not just the majority.
“Importantly, this is not an ‘us versus them’ sector and we will continue to work closely with residents to ensure expectations are met for everyone, not just the vast majority.”
A Call for Balance
The Retirement Living Council acknowledges that while some residents may not have had their expectations met, the focus should be on the vast number of people who have benefited from living in retirement communities. These villages, Gannon pointed out, provide not only housing but also health and wellbeing benefits that are crucial for older Australians.
The ABC’s report, however, has added fuel to the calls for greater reform in the sector, with Sharkie continuing to press for retirement villages to be recognised as a financial product, bringing them under stricter financial regulation.
The RLC, meanwhile, remains focused on working with governments to address concerns while maintaining the lifestyle benefits that these communities offer.
For now, the retirement village industry finds itself in the midst of a public debate, balancing the need for transparency and regulation with its mission to provide affordable, age-friendly living environments.
I have lived in Lincoln Grove Retirement Village for the past 21 years. I did my homework before moving into the village by studying my contract and even downloading a copy of the SA Retirement Villages Act. I was well aware that it was not an investment but a Lifestyle to Live My Retirement. I have no regrets as it’s the best decision I have ever made. I am well aware of the exit fees and refurbishment costs etc.
We have had 4 owners during the 21 years and I can assure you that Retire Australia are by far the most professional and transparent of them all. I hope to enjoy many more years here.
Mr Gannon is absolutley correct! a family home should not be considered an “investment” – it’s a “lifestyle” but none of us expect to lose 35% of the value when we sell the home.
What a joke. It is well known that retirement villages have been set up for business, and are on the stock exchange as businesses. The rules and regulations are worded in such a way to ensure that the sale point is like a swan, smooth on the surface but strong movement under the water to ensure there is a strong profit for the business.
“Churning” has also become a feature of these businesses, as this is where profit margins are increased. Large exit fees, and the sale to the incoming buyer is also higher.
To state that the majority of elders in these situations are content is because there have very little choice once they have entered. Retirement villages are institutions, set up to provide swimming pools etc, and a lifestyle free of care. But, like any institution, the rules and conditions are mandatory, and can be increased at any time.
Yes, they offer a lifestyle, yes they offer protection from the frailty of old age and medical issues. Some are excellent, some not so good, some , well, we won’t go there.
Unfortunately, many elders do not study the contracts, nor realise that the contract can change. However, it is exactly the same as buying a house or an apartment, the old adage of “buyer beware” is essential. Research, comparisons and talking to residents would help many future buyers to make the right choice. But, in many cases, it can be the relatives that make the decisions so all of us, as we reach our golden years need to plan our future, and seek options. They are out there, including retirement villages, just work out what you want and make sure you get what you need. Like a garden bed, there are flowers and weeds. Choose wisely.