The taxpayer-funded broadcaster has its own Fact Check team determining the accuracy of claims by politicians, public figures, advocacy groups and institutions.
Its 7.30 program made an 18-minute broadcast with journalist Adele Ferguson "exposing the great retirement village financial trap." It was entitled "Retirement Rip-Off"
The Weekly SOURCE examines the claims made on the broadcast on Monday evening.
Financial Rip-Off: Retirement living is not a financial investment. It is a lifestyle choice where people want security, want to be with like-minded people, want less maintenance. This is stated on various government websites. The following is taken from the Queensland Government, where two of the cases featured are from:
- Buying into a retirement village is not the same as buying an investment property.
- You may face substantial costs when leaving a village. Buying into a retirement village is a lifestyle decision, not an investment to make money.
- Living in a retirement village is not the same as owning your own home or renting. In most cases, you do not purchase the property title to the unit. Instead, you purchase a right to live in the unit and the right to benefit from the lifestyle facilities the village offers.
- The cost of providing the unit and lifestyle generally exceeds the amount you pay when you move in to a retirement village. The village operator recovers the balance through an exit fee payable after you leave the village. This amount, together with other fees and charges agreed to when you moved in, are deducted from your refund when your unit is ‘sold’ to the next resident.
The Exit Fee: It is explained in a contract that is given to a would-be client in advance, whom is told to take legal and financial advice before signing it. Some operators go as far as to request a statement to be signed by would-be residents should they choose not to seek legal advice. The statement says they understand their decision to not seek advice in making the deicison to enter the village.
More and more operators are offering contracts different to a DFM (deferred management fee). The PwC Retirement Census 2023 states a higher percentage of operators are offering a deferred management fee structure based on the ingoing price with a separate share in capital gains.
Not once in the broadcast did it state that the operator makes no money from the resident until they decide to leave the village.
Refurbishment Costs: When exiting a village, a resident may be asked to contribute to the cost to get the unit market sale ready, whether that be through reinstatement or refurbishment. This is a standard contractual term and is recognised by the Retirement Villages Acts in each state and territory. Living Choice always makes its homes as good as new at resale and shares the capital gain with the outgoing resident 50/50.
Unregulated Sector: The retirement living sector, and its financial options, are regulated by state and territory legislation. Retirement Villages Acts have been recently amended in favour of the protection of residents in Queensland, NSW and Western Australia. New amendments are being proposed in Victoria and South Australia.
Aged Care Concessional: Joan Green was always a concessional for residential aged care as she is reported to have paid $383,000 for a home. The ABC reported that the DMF had left her with "insufficient money to pay for an aged care room and has had to join the waiting list for a government-subsidised spot." This was always the case even before she entered the retirement village. If the ABC is going to start reporting whenever an elderly Australian is left waiting to get into aged care, then they will dominate their media coverage for the next 15 years with the significant undersupply of aged care facilities across the country.
