A contract check is a financial snapshot of what a resident would receive and what they would owe if they left the village on a given date. Understanding the full financial picture in advance avoids surprises when a resident leaves a village.
Every resident is entitled to one check each year, and can ask for one at any time.
When is a contract check most useful for a resident?
A contract check is most useful when a resident:
- wants to understand their financial position under their contracts
- is thinking about leaving and wants to know what they would receive
- is considering moving to a different level of care and wants to understand their exit entitlement
- is moving to a residential aged care facility or alternative accommodation and wants to understand how much of their exit entitlement could be drawn on for payments before it is paid out. Go to Exit entitlements and aged care accommodation payments.
The check can also be useful as a planning tool even when a resident has no immediate intention to leave.
When must the operator provide a contract check?
The operator must provide a contract check:
- Annually: once each calendar year and no later than 14 days after the anniversary of the date on which the previous year's check was given. The operator must not charge the resident for this contract check.
- On request: whenever a resident asks for one, at any time. The operator must also help any resident who needs assistance making the request. The operator must not charge the resident for this contract check if the resident has given at least 28 days written notice that they intend to leave the village.
If a resident requests a check, they can ask for it to be provided in a meeting with the operator. The operator must respond in writing within 7 days and hold the meeting within 30 days. The resident may bring a support person or representative. After the meeting, a written summary must be provided within 7 days.
If the resident has not asked for a meeting, the operator must provide the written check within 30 days of receiving the request.
Penalties apply for failing to provide a check or hold a meeting on time.
What does a contract check contain?
Every check must give the resident an opportunity to ask questions about their contracts, in writing or in a meeting.
For owner residents, the check must include:
- the resident’s obligations when terminating the contract, selling the premises, and/or vacating the premises
- a reasonable estimate of all costs payable on departure, including any deferred management fee, capital gain or loss sharing amounts, sale-related costs, and any agreed renovation costs
- a reasonable estimated sale price for the premises
- a reasonable estimate of the amount to be paid to the resident on sale
- details of the village's insurance arrangements.
For non-owner residents, the check must include:
- what the resident must do when terminating the contract or permanently vacating
- a reasonable estimate of the exit entitlement that must be paid to the resident
- details of the village's insurance arrangements.
All figures in a contract check are calculated as if the resident left on the date stated in the check. That date must be the date the check is given or no later than 30 days after that date.
What to do if the figures seem wrong
Residents should ask questions if any figure in the check is unclear or seems incorrect. The check must include an opportunity to ask questions, either at a meeting or in writing.