Lifestyle community retirement village costs

Lifestyle community retirement village costs

by Christine Hopper

Lifestyle community retirement village costs

Moving to a lifestyle community retirement village is an opportunity for a new lifestyle. But what are the actual Lifestyle community retirement village costs.

Every lifestyle community retirement village costs are specific to that facility. You expect your chosen lifestyle community retirement village costs to include an entry payment and a regular service fee. You might be hoping that a home in a lifestyle community retirement village costs less to run than your former independent housing.

Where do you find out the potential lifestyle community retirement village costs?

When you visit a lifestyle community retirement village in Victoria for an ‘open day’ or for a personal tour, you must be given a Factsheet.
The Factsheet must include information about the lifestyle community retirement village costs on entry and the regular ongoing service fees, including any rents, owners’ corporation fees or special levies.
Details of any deferred management fees, capital gain sharing arrangements or exit charges such as lifestyle community retirement village costs for renovations and marketing, must also be disclosed in the Factsheet.
More details of the particular lifestyle community retirement village costs must be provided to you before you sign a contract for moving into a Victorian lifestyle community retirement village.

What are the components of the lifestyle community retirement village costs?

The ‘ingoing contribution’ or ‘purchase price’ for your particular apartment is the lump sum upfront payment that you need to pay before you are given the keys to your apartment or villa. Some residents pay only a small ‘ingoing contribution’ and then regular rent payments.

Most lifestyle community retirement village costs include a monthly service fee. The service fee covers the managers’ costs of operating all of the communal features of the lifestyle community retirement village.

When you leave the lifestyle community retirement village you expect to pay the costs of refurbishing your apartment ready for a new resident together with any marketing costs. When you vacate your apartment in the lifestyle community retirement village, the manager will prepare it for ‘sale’ to a new resident. The refurbishment might be for new carpet and repainting internal walls. But you could be charged for renovating the bathroom and kitchen to the standard of newer apartments within that lifestyle community retirement village.

The refurbishment charge and marketing fees to attract a new resident could be set as a percentage of the new resident’s ingoing contribution for your apartment or the ‘actual costs’ or by another formula as stated in your Contract.

Deferred service management fees and capital gain sharing levies apply when you exit the lifestyle community retirement village. The calculation method used for exit fees from this lifestyle community retirement village must be included in the Factsheet for enquirers. The details for your specific apartment or villa would be included in your lifestyle community retirement village contract.

Estimation of when and how much you would receive back when you leave the lifestyle community retirement village is complex. Special rules apply regarding the timing of payments to lifestyle community retirement village residents who are moving on to Commonwealth regulated residential aged care.

Would I lose my Age Pension if I move into a lifestyle community retirement village?

Your Age Pension entitlement depends on your asset and income position and the Age Pension rates and means tests in force. If you sell a suburban home to buy into a lifestyle community retirement village then your Age Pension might be reduced or cancelled.

If you retain at least a part Age Pension or some DVA Income Support Supplement, then you could be entitled to the Pensioner Concessions on Municipal Rates for your lifestyle community retirement village villa. Pensioners who pay very modest ingoing contributions, or no lump sum ingoing payments, could claim Rent Assistance to help with their lifestyle community retirement village rent and service fees.

Would living in this lifestyle community retirement village cost more than I could afford?

Moving into a lifestyle community retirement village is about buying a lifestyle. The new lifestyle might involve a higher level of expenditure than you had when living at home because you now have a better range of facilities and services.

Some of your home ownership expenses could be covered by your ‘service fee’ in the lifestyle community retirement village. For example, the building structure could be insured by the facility operator so you would need to separately buy home contents insurance only. External building maintenance and some gardening, are also the responsibility of the facility manager so you could be paying for these as part of your service fee.

Your income could also change when you enter the lifestyle community retirement village. If the ingoing contribution for your lifestyle community retirement village apartment were significantly less than the proceeds of sale of your former home then you might have more money to invest. The additional investment income could help with your new pattern of expenditure.

Please be aware that your Age Pension, or DVA Income Support Supplement, could be reassessed if you have additional assets following your move into the lifestyle community retirement village. If you released equity from your former home so that you have more cash on hand then your Centrelink or DVA Pension amount could be reduced under the Asset and Income Tests.

The combined impact could be that your overall income does not increase greatly because your Pension income is reduced on account of your additional financial assets. You might need to use a significant part of the interest or other investment income generated from the additional financial assets to pay for your new lifestyle.

Help is available to consider the DVA and Centrelink aspects before you sign up for a lifestyle community retirement village.
Contact Financial Care Services  or call us on (03) 9808 0338, to arrange a lifestyle community retirement village entry consultation.
Financial Care Services is an independent financial advisory service specialising in seniors in transition to new accommodation and DVA Centrelink Pensions

Independent financial advice about lifestyle community retirement village costs

The Factsheet provided to you when you visit a lifestyle community retirement village must include a Statement about the desirability of obtaining independent advice and understanding the financial commitment of entering, living in and leaving the lifestyle community retirement village.

A consultation with Financial Care Services could Illustrate your lifestyle community retirement village costs. Your potential income from DVA or Age Pension and interest income could be included in your Illustrations.

Your family are welcome to accompany you to your consultation at Financial Care Services. Your Attorney and other family members would then understand that you are buying a ‘lifestyle’ and that your exit payment might be less than your ingoing contribution.

Christine at Financial Care services is an independent financial adviser experienced with DVA and Centrelink income support and health care cards. Contact Financial Care Services to arrange to arrange a lifestyle community retirement village entry consultation.

Financial Care Services is an independent aged care financial advisory service specialising in seniors in transition to new accommodation and lifestyles plus Centrelink Pensions.

Financial Care Services core value in financial advice is to assist with your money plan in the responsible management of your assets to generate the cash flow needed for your lifetime planning. Christine at Financial Care Services understands both the DVA and Centrelink Pensions systems and the Commonwealth aged care fee arrangements.

To make an appointment for confidential, independent and professional advice about Centrelink, lifestyle or financial issues please contact Christine Hopper  or call Financial Care Services  on 03 9808 0338.

Disclaimer:
The information contained in this website is of a general nature only and does not constitute “financial advice”. You should obtain your own personal financial advice before investing any money or moving in to any retirement village, lifestyle community or aged care facility. Financial Care Services is licensed to provide financial advice to individual clients based on their personal situations.
All eligibility for Commonwealth benefits will be determined by Centrelink or DVA, based on your personal position as documented and the legislation and Regulations in force at that time.
© 2015 Financial Care Services Pty Ltd. All rights reserved.