MOVING INTO A RETIREMENT VILLAGE
If you are thinking of entering into a retirement village or perhaps are contemplating long term care for the future, we recommend that you investigate the cost implications and compare what different villages offer as the level of care provided by different villages and their cost structures can vary quite significantly.
The monthly care fee for hospital level care is between $4,500 to $5,500 (or more) per month.
If the resident is assessed to be requiring long term care, some retirement villages require the resident to make a capital investment of $400,000 or more for the Care Suite as well as paying the monthly care fees. In those instances the residents will be obliged to enter into a new occupation right agreement for the Care Suite (and to pay a separate Capital Sum for the Care Suite), and they will be charged up to a further 30% Deferred Management Fee on the Capital Sum which is not offset in any way against the Deferred Management Fee the resident may have already been charged for the standard retirement village unit.
Incidentally, there are some villages who cap their Deferred Management Fee at a maximum of 20% of the Capital Sums in respect of all occupation right agreements between the resident and the Village. What this means is that if the resident is to transfer to a serviced or other independent unit or into rest home an hospital care, although the resident must sign a new occupation right agreement for the new unit (and therefore pay a further Capital Sum for the second unit), the cumulative Deferred Management Fee percentage will be limited to a maximum of 20%. For instance, if the resident has incurred 15% of the Capital Sum of his or her first unit, the resident would pay a Deferred Management Fee of no more than 5% for the second unit. If the resident has contracted to pay an additional service fee, the resident will only be charged services he or she continues to receive.
The bottom line is that the monthly fees and capital sums required by different villages can vary significantly and need to be checked very carefully. Contact Tony Fortune, Catherine Lee or Lauren McIvor for assistance.