Rachel Payne made a contribution in parliament to the Retirement Villages Amendment Bill 2024, on behalf of Legalise Cannabis Victoria, and her colleague David Ettershank MP.
Tuesday the 27th of May 2025,
Victorian Legislative Council
Rachel PAYNE (South-Eastern Metropolitan):
I rise to make a contribution to the Retirement Villages Amendment Bill 2024. Those of us lucky enough to have parents who have lived long lives may have some experience of the stress involved in navigating the residential, retirement and aged care sectors. It is a very complex area. In relation to retirement villages, confusion and miscommunication over contracts often only arises when a resident is leaving, and then there may be a long wait for their exit entitlements. This obviously exacerbates an already challenging time for residents and their families, so it is pleasing to see the Retirement Villages Act 1986 getting this much-needed review.
The bill seeks to improve the regulation of retirement villages and provide better consumer protections for people entering and exiting retirement villages. That includes the requirement that retirement village operators use standardised contracts and information so that potential residents are better able to understand what they are getting into and compare different villages more easily. Operators will be required to report to residents annually on the status of their contracts. They will also need to develop mandatory emergency plans. The bill introduces a dedicated dispute resolution service to be run through the Department of Government Services. It seeks to introduce stronger protections around the exit entitlements paid to residents when they leave a retirement village, and it clarifies how operators calculate and disclose fees to residents. Generally it seeks to improve the information provided to people so they can make informed decisions about this important stage in their life.
We received a lot of advocacy from retirement village residents who had concerns with some aspects of the original bill as drafted. My Legalise Cannabis colleague Mr Ettershank, who spent some 20 years working in the not-for-profit aged care sector prior to entering Parliament and who knows a thing or two about the sector, was able to work with the government to resolve some of these issues. I believe this bill we have before us is significantly improved as a result of his work. I commend the minister’s office for this engagement and willingness to work through our suggestions, and I would like to particularly acknowledge Joel Blanch for his work on this bill. We will be asking some questions during the committee stage to get some further clarity around some aspects of the bill.
It is worth noting that retirement villages are commercial ventures. Operators are providing goods and services at a price to get a return on their investment in line with the risks they are taking. We know that the vast majority of retirement village operators are doing the right thing. It is important to get the right balance between providing protection for residents and allowing operators to run a business and stay afloat. For example, we do not support changes that would extinguish existing contracts or retrospectively amend residents’ agreements with operators.
We have had representations from residents seeking to amend agreements in relation to deferred management fees. As the name suggests, these are fees that are deferred until the resident is exiting the retirement village. The fees are calculated at the entry point to give people some certainty of what they will owe at the exit point, but this tends to be forgotten until it is time for the resident to leave. Nobody likes deferred management fees, but we cannot support retrospective amendments to alter or abolish them. We would see a great many retirement villages bankrupt if these fees were abolished. It is unsustainable. It could represent a loss of hundreds of thousands of dollars out of every unit, which would be disastrous for operators.
However, we have worked with the government to make changes to the original bill, which I will now turn to. Firstly, the lack of information provided by operators around insurance coverage has been a source of anxiety for many retirement village residents. The inquiry into the 2022 floods heard from residents of the Rivervue Retirement Village whose homes were inundated during the floods and unable to be occupied for a long time thereafter. In addition to the trauma and stress related to the floods and their aftermath, affected residents were suddenly made aware that they were underinsured and that there was a significant gap between the insurance that Tigcorp and the operators at Rivervue had obtained and what that insurance actually covered. I quote from a submission to the inquiry from a Rivervue resident:
… Tigcorp had completely underinsured the village, as they had $5 million of building insurance for the entire village, which represents roughly 6 per cent on an asset of $80 million, which had to cover temporary accommodation costs too.
The resident said they had to urgently find and pay for their own temporary accommodation:
… all because Tigcorp had failed to get proper insurance for Rivervue and had never revealed it to the residents.
It seems obvious that retirement village residents should know what insurance cover the operator has taken out, including coverage of buildings and equipment, public liability and the cost of alternative accommodation if their residence is impacted by a disaster such as floods or fire. A certificate of insurance is a basic starting point. It summarises the type of cover and risk, the limit of indemnity, and the excess in respect to the types of cover, but it misses important things such as underinsurance. The residents of Rivervue were underinsured, which they could have addressed had they had the right information. They could have looked at the gaps and topped up their own insurance, but incredibly, they found that it was impossible to get that information from Tigcorp. A certificate of insurance also admits exclusions. Residents need to know what is not covered by the operator’s insurance, like temporary accommodation costs if the residence is uninhabitable, and they need to know what risks are not insured. Does the operator’s insurance adequately insure for all risks?
We are pleased that the government has agreed to our suggested amendment to require village owners and operators to disclose insurance information as part of the information provided to new and prospective residents and to exiting residents as part of their annual contract check. Additional disclosure requirements for insurance will be prescribed in regulations.
Moving on to vacant possession, many stakeholders thought the term ‘vacant possession’ was ambiguous in the legislation and wanted to see it better defined. Residents had concerns about operators having unreasonable expectations around what constituted a vacant property ready for resale. In circumstances where residents are depending on the sale of their residence to finance the next stage of their life – for example, a resident leaving the village to move in with their family – they wanted some assurance that the process of vacating and selling their retirement residence would happen relatively quickly. We are pleased the government has amended the legislation to provide clarification of the terms ‘vacant possession’ and ‘permanently vacating’ for the purpose of the Retirement Villages Act 1986.
The cooling off period for entering into a residence contract has been extended from three to seven business days. This is a reasonable amendment and in line with other jurisdictions.
The original quorum requirements for a meeting of residents in a village was at least half of the total number of residents who are entitled to vote, which is simply not feasible. Obviously you will always have very committed residents who will show up to a meeting. But some of these retirement villages are huge, with 500-plus elderly residents, so expecting 250 of them to turn up for a meeting is unrealistic. Accordingly, the government has amended the quorum requirements, basing it on a sliding scale. For larger villages of 40 residents or more, 25 per cent of residents are needed to form a quorum; for smaller villages of less than 40 but more than 20, 10 residents are required; and for villages with fewer than 20 residents, half of those residents are required. This is a sensible measure.
These amendments will afford greater protection for residents of retirement villages, but there are growing numbers of Victorian retirees who are living in residential tenancy parks. Indeed they are becoming a common alternative for retirees, particularly those with less means. It is critical that the government implement legislation for residential park communities that aligns with the rights afforded to those living in retirement villages. We understand that some research is underway, and we would expect the results to be reported to Parliament within six months. Many of these lifestyle villages are simply existing caravan parks, and they are high risk in terms of climate change. There is currently a vacuum that exists around residential tenancy parks. They are not covered by the Residential Tenancies Act 1997, and they are not fully covered by caravan parks and moveable dwellings registration and standards regulations. We look forward to seeing the results of the government’s research and some action in this space.
Our population is ageing. By 2046 it is estimated that one in four Victorians, a quarter of us, will be aged over 60. If we are fortunate enough to live to a ripe old age, a great many of us will be living in some form of aged care or retirement living. It is a fact. As much as we hope for our loved ones to be able to live in safe, secure accommodation with all the necessary supports and services and no scary surprises, we would also want this for ourselves when the time comes. We believe this bill strikes a good balance in offering greater protection for retirement village residents while enabling owners and operators to manage their villages sustainably.
I would just like to finally note a thank you to my colleague Mr David Ettershank for all the work that he has done on this bill. I think he has done an amazing job of collaborating with the government and with stakeholders and finding some resolutions that really do work.
I commend the bill to the house.
Related:
> Gambling Legislation Amendment (Pre-commitment and Carded Play) Bill 2024 – Rachel Payne
> Health Legislation Amendment (Legislative Reform) Bill 2024 – Rachel Payne
> Justice Legislation Amendment (Integrity, Defamation and Other Matters) Bill 2024 – Rachel Payne
External:
> Retirement Villages Amendment Bill 2024 | legislation.vic.gov.au
