Government is strengthening protections for retirement village residents through faster repayments, earlier access to money, fairer contracts and stronger minimum standards, Associate Housing Minister Tama Potaka says.
“The maximum repayment period will be shortened from the 12 months we had initially indicated to nine months,” he said.
"And operators will have to pay a resident who is moving 10 per cent of their net termination proceeds within four weeks rather than interest after six months.’’
But the changes do not sit well with Retirement Village Residents Association of New Zealand national president Brian Peat.
Peat was in Ashburton earlier this year to talk to residents at Lochlea Lifestyle Resort and Terrace View about proposed changes to a ministerial review of the Retirement Villages Act 2003.
‘‘It is outrageous that they have now exempted that the people who have died and they will not qualify for early repayment,’’ he said.
‘‘If this goes thru the House, the new Bill will be worse than the current one for existing residents and we can’t let that happen.’’
Peat was adamant pressure from the association to reduce the timeframe residents, or their families, had to wait for payment was ‘‘not finished yet’’.
When he was in Ashburton, he said three or four months was a more reasonable timeframe.
Meanwhile, Potaka said via a statement that government had listened to older Kiwis and their whānau, and were acting.
“They told us 12 months was still too long and that interest after six months would not provide meaningful help when money was needed most. We listened and strengthened the package.”
The automatic 10 per cent payment will replace the previously announced interest requirement.
A resident buying an average-priced retirement village villa in 2028/2029 could expect the initial 10 percent payment to be around $60,000 when they move out.
“It will give older Kiwis and their whānau money sooner, and certainty about when the rest will arrive.”
Government considered calls for a three-month repayment deadline but Potaka said modelling found this could require the sector to hold or have access to between $3.2 billion and $4.1 billion.
It could add up to about $118,000 to the cost of entering a village if all costs were passed on to residents, he said.
“Nine months strikes a fair and responsible balance. It gets residents their money sooner while protecting the affordability and viability of retirement village living.”
The Retirement Villages Amendment Bill will be introduced in the next Parliamentary term, and the new repayment requirements will apply to occupation right agreements signed one year after the legislation comes into force.