Exit entitlements
Your retirement village contract may entitle you to a payment after you leave your village, based on either:
- your original ingoing contribution, minus any fees owed to the retirement village operator
- the next ingoing contribution received by the operator, minus any fees owed.
For more information about ingoing contributions and fees, view our Fees and charges - entering a retirement village page.
Your contract normally determines when the retirement village operator must pay your exit entitlement. Different rules about the timing of these refunds apply for contracts signed after 1 August 2006.
Extra retirement village contract terms about exit entitlements
If you signed your retirement village contract after 1 August 2006, it will either:
- allow you to be paid your exit entitlement six months after you have moved out, even if your retirement village unit has not changed hands by then, or
- if extra terms (see details below) are included, allow the village operator to pay your exit entitlement only when your unit changes hands, unless a court or tribunal finds these extra terms have been breached.
These extra terms give you control over the marketing of your unit by:
- giving you the right to engage an independent estate agent to market your unit for sale
- committing the retirement village operator to use all reasonable methods to sell your unit (if you engage the operator as agent)
- stopping you from being forced to pay any unreasonable charges relating to selling your unit
- entitling you to receive monthly reports about enquiries and prompt advice about any offers if the retirement village operator is marketing your unit
- giving you control over the advertised price and the selling price. You must be reasonable about the advertising price and the selling price you set.
Calculating exit entitlements
The law has set alternative ways to calculate the amount of your exit entitlement where it cannot be determined because your retirement village unit has not yet changed hands.
In commercial retirement villages, where you pay a market price for your unit:
- the current value of the right to occupy the unit will be determined by an independent valuation
- your entitlement will be calculated using the value from this valuation
- you and the retirement village operator share the cost of the valuation in the same proportions as you share any capital gain under your contract (otherwise, the operator must pay the cost).
If you did not pay a market price for your unit, you and the retirement village operator can determine the current value of the right to occupy the unit in any way. However, the value cannot be less than the amount you originally paid, adjusted according to the consumer price index.
Aged care accommodation payments when leaving a retirement village
Note: Aged care accommodation costs are regulated by the Commonwealth Government. For more information, visit the Understanding aged care home accommodation costs page on the My Aged Care website.
If you are a non-owner resident, the payment of your exit entitlement could be delayed if the village operator cannot quickly find another person to occupy your retirement village unit.
This delayed payment could be a problem for non-owner residents who need to meet the costs of moving into an aged care facility.
In 2006, a regulation was introduced to protect non-owner residents in this situation, and enable them to access money for their daily accommodation payments (DAPs) or refundable accommodation deposit (RAD). In response to changes to how aged care facilities can charge new residents for their accommodation, this regulation was changed in 2017 to only require retirement village operators to fund DAPs for new residents.
Retirement village operators have different obligations for assisting you to enter aged care, depending on when you entered the village.
If you signed your retirement village contract before 30 July 2017
If you enter aged care and your retirement village unit has not yet changed hands allowing you to access your exit entitlement, the village operator must, upon request, fund your:
- DAPs from your entry into aged care until you receive your exit entitlement, or
- RAD no later than six months after your entry into aged care (unless the operator is granted a hardship exemption by VCAT).
In both cases, the operator must only fund the DAPs or RAD up to a maximum of 85 per cent of your estimated exit entitlement. At the time when the exit entitlement is payable, any aged care payments funded by the operator will be deducted.
If you signed your retirement village contract on or after 30 July 2017
If you enter aged care and your retirement village unit has not yet changed hands allowing you to access your exit entitlement, the village operator must, upon request, fund your DAPs from your entry into aged care until you receive your exit entitlement.
The operator must only fund the DAPs up to a maximum of 85 per cent of your estimated exit entitlement. At the time when the exit entitlement is payable, any aged care payments funded by the operator will be deducted.
Requesting funds for an aged care payment
The retirement village operator has 14 days to comply with a request, even if that takes the payment date beyond the due date of your aged care payment. Notify the operator well before your payment is due, so you can make the payment on time. Tell the operator or the operator’s authorised representative the:
- amount of the aged care payment
- date you have to pay it.
More information
See more information about ongoing charges when you leave a retirement village.