Sep 04, 2018

Retirement village industry “in a state of flux”

The New South Wales retirement village industry is at a “critical” point, where it must improve its reputation, or risk falling “off the face of the earth”.

So said Kathryn Greiner, lead of the Greiner Inquiry into Retirement Villages, at Criterion’s ‘Policy, Regulation and Community Engagement in Retirement LIving’ conference, held in Sydney last week.

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Ms Greiner said the industry needs to identify – and honestly and frankly address – the issues it faces.

Ms Greiner listed some of the key facts about NSW retirement villages:

  • There are 653 retirement villages in NSW
  • There are 267 registered operators
  • There are 56,000 residents
  • The average age of those entering retirement villages is 75 years
  • The average age of retirement village residents is 80 years
  • Average length of tenure is 7 years

With residents now entering retirement villages in an older age bracket, “who’s using the gym, the pool, and the theatre,” Ms Greiner asked.

“What happened to the 55+ concept? This is where we’re in a state of flux,” she said.

Key recommendations of The Greiner Inquiry

Ms Greiner spoke about how the recommendations made in the report on the Inquiry will “roll out”.

The report recommends that consumer protections be strengthened in the Retirement Village Act 1999 (NSW), and the terms and conditions be simply explained in a way that is understandable, timely and meaningful.

In retirement village marketing, “terms and conditions have to be very clear, transparent and timely,” said Ms Greiner.

Exit fees must be explained in plain English, and with examples to illustrate key points. Calculations in the exit fees must also me clearly explained.

“Exit fees are a hot button topic, so one of the things we’ve been driving is that contracts and exit strategies need to be written in plain English,” she said, giving insurance industry contracts as an example. Information must also be available in the language of the resident’s orientation.

“It’s [exit fees are] probably the most complicated calculation I have ever come across in my life, and there is no simple statement about it. It needs to be very clearly understood, and it needs to spelt out. But you also need to remind people in the exit fees what is optional and what is not,” said Ms Greiner.

Contracts should be reviewed every three to five years, either with next of kin or a power of attorney.

Buy back times frames also need to be understood, so families know “where they are going”, she said.

Retirement village operators should have asset registers to increase transparency and help them manage their assets, and so that it’s clear “who is responsible for what”.

“Dispute resolution was also a hot button issue,” said Ms Greiner, saying there were not enough opportunities to resolve disputes simply and in place.

The report recommends that an independent dispute resolution process be established, and must be accessible and affordable and be designed so as to be appropriate for elderly people. Operators must be able to deliver dispute resolution processes in place, which is particularly pertinent to regional villages.

Villages can publish online dispute information, such as what dispute resolution services are available and how many disputes have been resolved, so that the public can judge for themselves, Ms Greiner said.

Safety processes should be improved – for example retirement villages should conduct fire and emergency drills. And retirement villages should be appropriately designed for older people, for example homes shouldn’t have stairs, doors should be wide enough for wheelchairs and walking frames, and footpaths should be built to enable elderly people to walk easily and safely around the village.

Nursing home managers should undergo management training, and follow a code of conduct, and there should be mandatory reporting of breaches of the code of conduct.

“I got the sense that a number of people working at the front line in retirement villages have no knowledge about ageing or the ageing process,” said Ms Greiner. Better training will also improve career paths for staff, she said.

“There is a great lack of understanding about older members of our community,” she said, noting that ageing happens in stages, but there is little awareness and planning for this.

Understanding elder abuse is also a “growing issue”, she said.

The report recommends that Fair Trading should have a greater role in the oversight of Retirement Villages.

Risks faced by the retirement village industry

Ms Greiner said there are a number of changes “coming down the pike” that could pose a risk to the retirement village industry – such as affordable housing mixes, such as those is being developed in Europe, baby boomers downsizing to apartments, and greater emphasis on ageing in place.

She pointed out that she doesn’t agree with The Hon Matt Kean MP, NSW Minister for Innovation & Better Regulation’s statement that he expects large increases in the numbers of Australians entering retirement villages as the population ages. “I would dispute that,” she said.

She said the industry is at a “critical” juncture, and from here it “will thrive or it will disappear and fall off the face of the earth.”

Ms Greiner said the industry’s greatest risk was “reputational risk” because the retirement village industry is a property play, rather than a care provider.

“The structure of retirement village living by operators is a property play, and the more complicated and confusing it is in that property space – a real hot button issue – the more the control lies in the operator’s hands, not the residents’ hands.”

“These are real risks… and i think it’s important they’re called out,” she said.

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  1. I am 68 and managing at home . My wife is in a nursing home but I live a stress free life at home. I have retired and can stay in the home wit very little extra care needed. Why should I go into a retirement home If my health fails the nursing home will be my next stop, We have local gyms pools and senior citzens centre for exercise and social interaction. The retirement home is to restrictive at my age 55 is the new 45 people go to these places to capitalize on the housing investment but I have a housing investment and no need to move Retirement homes are not even being considered.

  2. Kathryn Greiner gained a much deeper understanding of the retirement village industry than the responsible minister through the inquiry. An industry that can charge a buy price but only grant occupancy. Can charge the resident maintenance fees, administration fees, refurbishment fees, selling fees, all on a property only occupied, not owned by the retiree. Compare that to a traditional rental situation. Kathryn Greiner was not seduced by the industry as was the Victorian inquiry where the Andrews government has completely failed to introduce any meaningful reforms. NSW is introducing fire and emergency drills, Victoria does not even have it mandatory that an operator have an emergency plan or assembly point.

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