4 minute read
Your rights & responsibilities
Below is a list of questions you should be able to answer before settling:
◆ Will someone else still be living in the principal home? Should it be sold or rented out?
◆ What will be the impact of the move on your Centrelink payments (if any)? ◆ What special tax offsets may be available when living in retirement villages? ◆ Are there Capital Gains Tax (CGT) advantages to passing on the former home? What if the house is retained throughout your time at a lifestyle village? ◆ What are the entry and ongoing costs of retirement villages, and can these costs be funded effectively?
Can’t plan? Engage someone who can
During times like these, it is worth seeking the assistance of a qualified financial advisor. Having someone who will work closely with you to provide solutions may help.
A good financial advisor will explain your options in plain English, and will make sure you are aware of the options that could significantly improve your overall financial position.
The first thing your financial advisor may do is help you to understand, as simply as possible, your current financial position.
This could mean identifying any investments like shares, property or other assets you hold.
The services of a financial advisor may also involve clarifying any income streams, including government pensions, you might be receiving.
Borrowing money
Borrowing money to enter a retirement village may require the expertise of a mortgage broker who understands what the lenders are looking for in the way of deposit or equity.
Funding for these villages mostly comes from major banks and private lenders, but with larger deposits some second tier lenders can help.
The idea of downsizing and living in a retirement community may be appealing, but confusion and conflict can arise during your tenure if you make the move without understanding the financial or legal implications.
It’s important to understand your rights, responsibilities and obligations under the contract, before you sign.
Do your research
Before you sign a retirement village contract, shop around and do your research. Visit several villages that fit your requirements before deciding, talk to residents, look at the facilities and compare contracts.
Retirement legislation is set by individual State and Territory Governments and each has different requirements of what information and documents need to be supplied to you before you commit to a retirement village.
In Western Australia for example, you must be given a disclosure document outlining your contract, all applicable costs you will be charged for and a document detailing your rights, at least 10 days before signing a contract.
In New South Wales, retirement villages are required to use a standard contract and it is compulsory that you receive a disclosure document at least 14 days before signing a contract.
South Australia has a cooling off period of 10 days and on top of that you are entitled to a 90 day ‘settling in’ period, in which you can receive a full refund of the purchase price minus any rental costs for the time a unit was occupied and costs for services used.
You will generally not receive your exit entitlement back until the residence has been re-licensed if you leave the village during the settling-in period.
To enter a retirement village in Queensland, there is a 21 day precontractual disclosure process to give prospective residents easy access to information and financial or legal advice. You must receive a Village Comparison Document and Prospective Costs Document which ultimately assists you in comparing villages and also provides information about the costs of a village before you enter.
In Victoria the operator needs to give you a copy of the contract at least 21 days before you sign, while in Tasmania if you sign a residence contract, you can change your mind within five days of signing and be released from the contract.
Make sure you are familiar with the legislation in your State or Territory and know your rights and responsibilities when you decide to move into a retirement village.
Disclosure documents
Ask village management for the following documents so you know what to expect and can make an informed decision before signing on the dotted line:
◆ A copy of the resident contract
◆ A copy of the village rules
◆ Financial information about all applicable costs and charges ◆ A document detailing your rights and responsibilities as a resident of the village
◆ A checklist of things to consider and questions to ask
You are encouraged to request a number of disclosure documents from different villages to consider which village is most suitable to your needs.
Even when you have signed a contract there will be a ‘cooling off’ period which allows you to withdraw from the contract if you change your mind. The cooling off period can be anything from 3-14 days, depending on what State or Territory you are in. The legislation for State and Territory Retirement Acts can be found online agedcareguide.com.au /information/renting-or-owning, together with Resident Associations for each State and Territory who can help with advocacy, legal aspects and also promote the rights of residents to all levels of Government.
Before you sign a retirement village contract, shop around, do your research and get advice from a professional.
Find out more from the following organisations:
ACT: ACT Government, Access Canberra 132 281 accesscanberra.act.gov.au
NSW: NSW Government, Fair Trading 133 220 fairtrading.nsw.gov.au
NT: Northern Territory Consumer Affairs 1800 019 319 – consumeraffairs.nt.gov.au
QLD: Queensland Government, Department of Housing and Public Works 137 468 – hpw.qld.gov.au
SA: South Australian Government, Family and Community Seniors, Service SA 132 324 – sa.gov.au
TAS: Tasmanian Government, Department of Justice, Consumer Affairs and Fair Trading 1300 654 499 cbos.tas.gov.au
VIC: Consumer Affairs Victoria 1300 558 181 consumer.vic.gov.au
WA: Government of Western Australia, Dept of Mines, Industry Regulation and Safety 1300 136 237
commerce.wa.gov.au
