Rebekha Sharkie (Mayo, Centre Alliance) Share this | Hansard source

I move:

That this House:

(1) recognises that the regulation of retirement villages in Australia is highly complex and varies significantly between states and territories;

(2) acknowledges that retirement village fees can include upfront incoming payments, ongoing service charges, and exit or deferred management fees, the latter of which may equate up to 25 to 40 per cent of the resident's ingoing contribution or resale price;

(3) further recognises that while these fees are of a quantum which may apply to a prospective resident when purchasing a property freehold, most retirement villages offer only loan/license agreements or leasehold or similar agreements, which do not provide comparable security of tenure nor other rights;

(4) expresses concern that:

(a) negotiating and understanding a lengthy and complex retirement village contract can be difficult for some prospective residents; and

(b) the fees charged place some residents in financial hardship when they depart, such that they may not be able to afford a higher level of care if needed subsequently;

(5) calls on the Government to recognise that many retirement village contracts represent a financial product, and therefore warrant federal oversight and regulation; and

(6) further calls on the Government to work with the states and territories on national reforms for the harmonisation of retirement village regulation regimes such that:

(a) improved consumer protections and increased transparency and consistency are provided for all Australians entering retirement villages; and

(b) consideration is given to:

(i) regulation of retirement village contracts as financial products by the Australian Securities and Investment Commission; and

(ii) improved consumer protections and regulation by the Australian Competition and Consumer Commission.

I call on the government to give Australians living in retirement villages greater financial and consumer protections, and to take the lead in ensuring consistency and transparency across state and territory legislative regimes. While retirement villages are largely regulated under state and territory laws, elder law specialists and senior advocates have called for national reform and a harmonisation in the past. Many Australians enjoy retirement village living and it suits their lifestyle well.

Unfortunately, I'm also approached by many others who are appalled at the excess fees applied to retirement village living. One couple from the south coast in my electorate say that, after perceived changes to their retirement village rules, they have been told they will receive only $259,000 of an estimated selling refund of their property—the property they're living in, the property they don't own—of $417,000. This represents a loss of around $160,000, largely for the privilege of leaving. Another gentleman advises that, after paying $187,000 for his unit, his mother will be charged over $121,000—around two-thirds of the original incoming amount paid—when she leaves. She has also been told she will potentially be charged fees for up to six months after leaving if the property has not been resold to another person. A couple from a retirement village in the Adelaide Hills are concerned that fellow former residents have paid exit fees of between $80,000 and $100,000. They're calling for legislative reform so these fees are required to be fair and reasonable.

For many, the total fees for upfront incoming payments, ongoing service charges and exit or debit deferred management fees are eye-watering. Exit fees alone can be anywhere between 25 per cent and 40 per cent of a person's ingoing contribution. Residents have very little insight into or control of how some retirement villages calculate their exit costs—including the complete refurbishment of the unit, which may be demanded even if a resident is only there for a year. Many residents don't have any control over how the unit is marketed or when it's going to be put to market. This is all done in-house by the retirement village owners, and often at far higher rates, with commission that a real estate agent would charge, leaving exiting residents feeling powerless and out-of-pocket. Once fees are deducted, remaining funds leave some residents ill-equipped to pay for high-care-level needs. This is particularly worrying for many of them who are then moving on to aged care.

How can we listen to our constituents' stories and not take action in this place? This needs fairness and transparency. We have an uneven playing field of regulations in each state and territory, and often a power imbalance with respect to negotiations between prospective residents and the owners and managers of the villages. I urge government to look at the nature of retirement village agreements. These contracts are lengthy and confusing. If an agreement looks like a financial product and behaves like a financial product, it should be regulated like one and should have the strong regulatory oversight role that the Australian Securities and Investments Commission does.

This call for action is supported by National Seniors Australia, who have been calling for nationally consistent and strengthened retirement village legislation for years due to growing complaints from older Australians. Ian Henschke, their chief advocate, tells me people are confused and frustrated by the complexity of contracts and lack of protection when they are entering a retirement village, and are dismayed by the delays and egregious charges they're charged when they exit. Nationally consistent retirement village legislation is needed, and it needs federal government leadership. The South Australian Retirement Villages Residents Association, which represents 7,000 residents just in South Australia, believes we need to have greater consumer protection and transparency, and a balance of rights between operators and residents.

Retirement villages, for many, are a safe and welcoming place to live. As I said earlier, if an agreement looks like a financial product and behaves like a financial product it should be regulated like one, and we need Commonwealth oversight with respect to the ASIC and the ACCC. We can't continue to allow people who are living in retirement villages to be rorted and to feel completely powerless when they are buying what is essentially often their last financial product in life.

See this speech in context