Key Takeaways
- The New Zealand government has announced reforms to the retirement village sector, aiming to provide a more balanced and pragmatic response to key issues.
- The reforms include a process for former residents to apply for early access to funds in situations of specific need.
- Interest must be paid after six months if a unit remains unlicensed or unsold, and repayment of funds must be made no later than 12 months after a unit is vacated.
- Weekly fees and deductions will stop immediately when a resident vacates.
- The reforms aim to reduce stress and uncertainty for families when a relative leaves a village, and to strengthen the rights of residents.
Introduction to the Reforms
The New Zealand government has announced significant reforms to the retirement village sector, aiming to provide a more balanced and pragmatic response to key issues. Associate Housing Minister Tama Potaka, along with another minister, announced the reforms, which are part of the National-New Zealand First coalition agreement. The reforms are designed to address the uncertainty and stress faced by residents and their families, particularly when a relative leaves a village. Potaka stated that the reforms would deliver certainty and strengthen the rights of residents, while supporting the sector to grow and innovate for the future.
The Need for Reform
The need for reform in the retirement village sector has been highlighted by cases such as that of Patricia Price, a former resident of a Metlifecare property in Auckland. Price had paid $695,000 for a license to occupy and was owed $515,000 after leaving the village to live with her family. However, she had to wait 15 months for repayment, citing the sluggish housing market as the reason. The Retirement Village Residents’ Association complained to the Commerce Commission about village incentives for new buyers, and Price’s case has been used as an example of the need for reform. The reforms announced by the government would have prevented Price’s situation, as they include a process for former residents to apply for early access to funds in situations of specific need.
The Reforms in Detail
The reforms announced by the government include several key changes to the retirement village sector. Interest must be paid after six months if a unit remains unlicensed or unsold, and repayment of funds must be made no later than 12 months after a unit is vacated. Weekly fees and deductions will stop immediately when a resident vacates, providing certainty and relief for residents and their families. The reforms also aim to reduce the stress and uncertainty faced by families when a relative leaves a village, which is often a challenging time. By providing a more balanced and pragmatic response to key issues, the reforms aim to strengthen the rights of residents and support the sector to grow and innovate for the future.
Reaction to the Reforms
The reaction to the reforms has been mixed, with some groups expressing disappointment and concern. Nigel Matthews of the Retirement Village Residents’ Association expressed disappointment that the 56,000 people living in villages before the law changed would get few benefits, creating a two-tier system. The Retirement Villages Association, a lobby group of owners, also expressed disappointment, stating that the change would burden operators by heaping significant financial pressure onto small-to-medium-sized ones while putting the brakes on new villages and care beds. However, the government believes that the reforms are necessary to address the uncertainty and stress faced by residents and their families, and to provide a more balanced and pragmatic response to key issues in the sector.
Conclusion
In conclusion, the New Zealand government’s reforms to the retirement village sector aim to provide a more balanced and pragmatic response to key issues. The reforms include a process for former residents to apply for early access to funds in situations of specific need, interest must be paid after six months if a unit remains unlicensed or unsold, and repayment of funds must be made no later than 12 months after a unit is vacated. Weekly fees and deductions will stop immediately when a resident vacates, providing certainty and relief for residents and their families. While some groups have expressed disappointment and concern, the government believes that the reforms are necessary to address the uncertainty and stress faced by residents and their families, and to support the sector to grow and innovate for the future.
