In NSW, amendments passed to the Retirement Villages Act 1999 may require a retirement village operator to pay up to 85% of a resident’s exit entitlement directly to an aged care facility instead of to the resident, where their premises remains unsold.
The first eligible NSW Retirement Village residents will be able to apply for such orders from 1 August 2021. This right also applies to former residents who have had their property for sale before 1 January 2021.
Here are the key points:
- From 1 January 2021, a resident is able to apply for an exit entitlement order if their unit remains unsold after 6 months (metropolitan areas) or 12 months (outside metro areas)
- A resident may apply for an exit entitlement order only if the agreed valuation for the exit entitlement was calculated at least 30 days before making the application.
- Where no agreement can be reached, an independent valuation must be sought
- Operators may be required to pay up to 85% of the calculated exit entitlement to an aged care facility as the resident’s accommodation payment
- It is an offence for an operator to fail to make an accommodation payment to an approved provider of an aged care facility where the former occupant resides or proposes to reside if their application is approved
- An operator may apply to the Civil and Administrative Tribunal for a time extension or exemption in the case of significant financial burden
- Residents who entered an aged care facility prior to 1 January 2021 cannot request the accommodation payments but may still apply for an early exit entitlement payment either 6 months (metro areas) or 12 months (other areas) if their unit is not sold (after the 1 January 2021 start date)
- Residents entering an aged care facility after 1 January who are having their accommodation payments paid by the operator as a DAP, can also request an exit entitlement order after 2 years from the date of entering the facility, if their premises has not sold.
For more information, see the links below or contact our Retirement Villages Team.