Intergenerational Capital Wealth Lost

Retirees don't deserve the financial disaster that comes from downsizing from the family home into a retirement village. @SffpVictoria @ademsomyurek @_davidlimbrick @georgievpurcell @rachelpaynemp @dettershankMP @BradBattinMP @DavidDavisMLC @NStaikos #springst @AivGoesGreen pic.twitter.com/zSxfvEk82u

— Les Scobie (@retvilldotnet) February 4, 2025

Retirement Village Residents Like Frog in Slow Boiling Water

Victorian retirement village residents are as vulnerable as a frog in slow boiling water, they don't know what is really happening to them.

The reality is a slow transfer of their hard earned capital wealth, not to their families, but to greedy corporations. Then they have to rely on the Australian taxpayer to fund their aged care costs.

The Victorian Labor government has just written an operator centric legislative framework to support this process.

Retirement Village More Costly than a Residential Tenancy

Victorian Retirement Village residents can pay multiple times the cost of a residential tenancy for what is the same primary product, residential accommodation. Retirement villages are all smoke and mirrors hiding the true cost. 

Property ownership through retention of the family home or a true Body Corporate retirement village the only defence. 

Sting in the tail for Victorian retirees

Sting in the tail for Victorian retirees as the Jacinta Allan Labor government moves to enhance profits of retirement village operators. 

Hollow claims of striking a balance between facilitating industry growth and innovation with retirement village resident consumer protections.

Victorian Government moves against Retirees

The Victorian Jacinta Allan Labor Government is moving against Victorian retirees by mandating that retirement village residents will now have to wait 12 months to get their refundable money back on leaving the village. 

How do they fund themselves over that period? An absolute con job by the industry.

The government seduced by the industry into believing that they do not have the money to repay the outgoing retiree. This money was paid to the village operator by the retiree before they could move into the village.

It shows a clear failure of the industry to manage cash flow, and a clear failure of the government to understand the principle of cash flow management.

Allan Labor Government Hates Retirees

 Why does the Jacinta Allan Victorian Government hate retirement village residents?

Why does the Victorian government love retirement village operators by contracts requiring residents to pay an ingoing contribution, or entry fee, or buying price, to get into a residential tenancy independent living  unit, ILU, in a retirement village where they can be charged deferred and multiple split priced rentals.

The Victorian Jacinta Allan Labor Government 2025 version of the “ingoing contribution” Retirement Village loan/lease business model denies property ownership to a retiree for merely conditional occupancy, a 'residential tenancy' by any other name. This action hidden within a convoluted and misleading occupancy contract. 

Despite the payment by the retiree of an 'ingoing contribution' often commensurate with an ownership cost, actual property ownership is held by the operator. In a further burden on the retiree the financial benefits of this 'property ownership' are retained by the village operator whilst all the financial costs of this 'property ownership' are transferred on to the retiree. 

To rub further salt into the wound there is a Deferred Management Fee for the retiree to pay which can be as high as 40% on the 'ingoing contribution' paid. This fee is essentially a 'rental' payment by any other name hence the claim by retirees of paying double the odds, property ownership costs without the ownership plus a substantial 'rental' fee which by government statute is not allowed to be called 'rent'.

With receipt of the ingoing contribution and the retention of property ownership, retirement village operators can by statute transfer ownership costs and add a deceptively termed deferred fee, essentially a rental component, into complex contracts to double the effective rental over the retiree's occupancy period.

Legislators and Consumer Affairs Victoria have consistently failed to identify the spectacular profit increase by the operators using this Loan/Lease business model. A model which uses ambiguous and misleading mechanisms to hide the true cost of the occupancy in relation to the comparative market rate for residential tenancy. Only property ownership for the retiree can negate the blatant deception of Victoria's retirees, retirees who make the financially devastating decision to spend most if not all of their lifetime accumulated asset base to enter a retirement village.

On having entered the loan/lease retirement village the asset base is diminished over time through the cost of property ownership but without the ownership, the cost of the 'rental' deceptively named the deferred management fee, the further destruction of their asset base by the devaluation impact of inflation over the length of the occupancy period.

The Victorian loan/lease model for retirement village is best summed up -                                                          "What we are talking about here is the transfer of intergenerational wealth, not to families, but into the pockets of corporations. Shame about the elderly not having enough money for aged care."

Retirement Village Scales of Justice against Retirees

When it comes to the new Jacinta Allan Government Retirement Villages Act 2025. 

The scales of justice weigh heavily in favour of the retirement village operator and against the retiree.

Victorian Retirement Villages Act Shocker for Residents

The new Victorian Retirement Villages Act 2024 is a shocker for residents. The newly appointed Minister for Consumer Affairs @NStaikos will cop the blame for all the bungling since 2017. @jbourmanmp @ademsomyurek @_davidlimbrick @georgievpurcell @rachelpaynemp @dettershankmp pic.twitter.com/1YtvPzi5Yr

— Les Scobie (@retvilldotnet) December 19, 2024

Vic Government Fails Retirement Village Residents

Vic @jacintaallanmp government refuses to repeal/amend Section 38.5 in the new proposed RV act, this despite being aware of the problem. Another 'free kick' to retirement village operators. THE FOX IS IN THE HENHOUSE. @WendyLovellmp @georgievpurcell @JaclynSymes @HAAGHomeAtLast pic.twitter.com/OSs6RZauGf

— Les Scobie (@retvilldotnet) December 15, 2024

Retirement Village Reforms Petition Reaches First 100 Signatures

A consumer driven retirement village reforms petition reaches first 100 signatures.

Retirement village resident Les Scobie started an on-line petition to all governments pushing for meaningful reforms to retirement village laws throughout Australia.

The on-line petition can be reached at this link - https://www.communityrun.org/petitions/retirement-village-reforms

His petition places particular emphasis on the following areas -

Implement retirement village reforms inclusive of the following:-
1. Create greater fairness in the financial outcomes for residents for the provision of residential accommodation to older Australians.
2. Total revision of all Retirement Villages Legislation.
3. Easier access to the law for residents through the appointment of an industry Ombudsman.
4. Simpler contracts.
5. Greater clarity as to who is responsible for ongoing costs.
6. Amendment to the legislated definition of a retirement village to enable occupancy by way of a Residential Tenancies Agreement.
7. Outlaw the Deferred Management Fee model where the in-going fee does not reflect a relevant discount to the asking price of a commensurate property within the general community.

Having reached the first 100 signatures Mr. Scobie now wants to move to 200, 300 and beyond so as to send a firm message to both state and federal governments.

In a recent article in his home town newspaper entitled 'Retirees Beware' Mr. Scobie spoke of the pressing need for such reforms based on his own lived experience and his background in finance. - https://wangarattachronicle.com.au/2018/04/11/retirees-beware/

Mr. Scobie has produced tables showing the potential devastating impact on the capital value of a retiree from living in a retirement village.

Retirement Village Reforms Petition Reaches First 100 Signatures

The on-line petition can be reached at this link - https://www.communityrun.org/petitions/retirement-village-reforms