HON ALISON XAMON (North Metropolitan) [2.43 pm]: I move — That this house —
(1) notes the growing ageing population increasingly looking for suitable accommodation options to facilitate ageing in place;
(2) calls on the government to reform the Retirement Villages Act 1992 and associated subsidiary legislation as amatter of priority, particularly, but not limited to, strengthening provisions in the following areas —
(b) enforceability of a code of conduct;
(c) timely action by the Commissioner for Consumer Protection;
(d) training of managers;
(f) responsibility for capital maintenance and upgrade/replacement;
(g) refurbishment of residential units on departure from a village;
(h) dispute resolution process; and
(i) exit fees; and
(3) calls on the government to engage in extensive consultation with the sector, including the Western Australian Retirement Villages Residents Association, prior to finalising any proposed legislation.
I rise today because I want to draw the house’s attention to what I think is a very urgent and long overdue need for legislative reform to address a number of failings, which are, unfortunately, still very much evident in the Retirement Villages Act 1992. Unfortunately, too many of our older Australians have been subject to unfair practices and, at the moment, they have little to no recourse when this occurs. The inadequacies of the Retirement Villages Act will continue to impact on greater numbers of older Australians as our population rapidly ages. In preparing for this motion, I met a few times with the Western Australian Retirement Village Residents Association. I was also lucky enough to attend its recent annual general meeting, and I invited individual written submissions from WARVRA’s extensive membership base. I have also been informed by approaches that have been made to my office by concerned constituents who have difficulty in securing a fair deal for themselves or their loved ones. I suspect that I am not the only member here who, during the course of their term, has been approached, particularly over the course of this year. A number of people who have contacted me are family members of older people, particularly parents. I particularly acknowledge the recent 23 submissions that were made by individuals or small groups of residents, sometimes with only a small amount of notice.
I draw to members’ attention that one of the reasons this issue came to my attention was as a result of a parliamentary inquiry, the Select Committee into Elder Abuse. Of course, the deliberations and submissions from that inquiry have been made public so I am not speaking out of turn, but I think it is fair to say that the issue of retirement villages and concerns about the impact that is having, particularly on older Australians, very much requires our attention. I took it upon myself to look into this issue further to find out what is happening, and I am very concerned about what came to my attention.
We have to remember that Australia’s population is rapidly ageing. The population of people in Australia over the age of 65 is projected to grow from 3.7 million now to 8.7 million people by 2056. Today, around 12 per cent of WA’s population is aged 65 years and older, compared with only 7.4 per cent in 1971. The proportion of seniors is projected to increase to over 18 per cent by 2050. In raw numbers, this equates to one million Western Australians aged between 65 and 84 by 2050.
Seniors face very different housing challenges that are not experienced by other age groups and it is important that these characteristics are acknowledged when we look at different housing options. Baby boomers in particular bring a different set of social and economic characteristics from the generation of their parents. They are more likely to be educated, ethnically diverse and to have separated or divorced later in life. An increased proportion have not had children, while others are the primary carer for children or grandchildren, or continue to be the primary carer for older parents. Most importantly, and this is really critical when we are looking at areas of reform, most seniors have limited ability to increase their income and assets post retirement, and that means that they become vulnerable to changes, particularly in housing affordability.
The concept of ageing in place, which is something that we often talk about, is about more than ageing at home; it is also about making sure that people are able to keep connected with their neighbourhoods and communities with the overall aim of ensuring that we are improving quality of life. We know that older Australians want options that allow them to downsize in areas that suit their lifestyle. That includes making sure that they are able to continue to be close to their family and friends, while having access to quality amenities. Currently, the vast majority of seniors, we are talking about 65 per cent, are residing in their own homes; nine per cent are grouped into another category, which includes crisis accommodation, hospitals or institutions; 6.7 per cent are in private rental accommodation; 5.9 per cent live in retirement villages; five per cent live in residential aged care; four per cent are in public housing; and one per cent are in residential parks.
I note that the 2016 Bankwest Curtin Economics Centre report, “Keeping a Roof Over Our Heads”, which members may have seen, found that Australia’s housing stock is not meeting the demands of older Australians, primarily because most of Australia’s housing stock is made up of separate houses with at least three bedrooms. The lack of housing options means that older Australians continue to live in larger dwellings than they would like. In Western Australia, where four out of five dwellings are separate houses, more than one-quarter of people aged 55 years and over live in dwellings with three or more spare bedrooms. Increasing housing options is dependent upon not just the physical housing stock but also other factors such as costs and whether current housing legislation supports seniors’ needs. Again, the Bankwest report showed that 58 per cent of older people considering downsizing were put off by the high costs of stamp duty and real estate agent fees, with many considering that these costs were too high to make downsizing worthwhile. Seniors are, of course, not a homogenous population. They are as diverse as the rest of us. That means that there is an increasing need for a whole range of options to ensure that we are able to meet the needs of this rising population group.
Retirement villages represent an important component of our housing options that are available to our growing seniors population. In WA in 2014, 20 599 people, or 6.9 per cent of people over 65 years, were living in 15 846 retirement village dwellings. South Australia is the only state that has a higher percentage of retirees who are choosing this particular lifestyle. The Property Council of Australia predicts that the number of people who will choose to live in retirement villages is set to double by 2025. It is clear that there is a significant number of Western Australians whose living arrangements fall under the Retirement Villages Act, and that is why it is an issue that we should all be paying attention to. Issues around inadequate protections for older people in retirement villages have been well established and reviews of the act were undertaken in 2002 and again in 2010. The 2010 review made 100 recommendations for change and also recommended that 23, at that point, unimplemented recommendations from the 2002 review also be progressed. However, I have to say that action on these recommendations has been too slow, to say the least, and that is certainly the view of the Western Australian Retirement Villages Residents Association as well. Due to the volume and complexity of the review recommendations and the need for urgent action to address community and stakeholder concerns, the recommendations relating to the amendment of the act were always intended to be dealt with in two bills.
In 2012, the first of these amendment bills was dealt with. That bill included some quite important provisions relating to the management of retirement villages by prohibiting certain people, such as bankrupts or sexual offenders, from operating or managing a retirement village, and by enabling the appointment of an interim statutory manager to manage a village, particularly when the wellbeing or financial security of residents was deemed to be at risk. It also allowed for more time for prospective residents to consider pre-contractual disclosure and have a longer cooling-off period; it gave residents the right to appeal to the State Administrative Tribunal against excessive or unwarranted increases in recurrent charges; it limited the time within which recurrent charges are required to be paid by non-owner residents after they leave the premises and the lease can be onsold; it enabled SAT to make specific orders relating to the completion of works and the fulfilment of contract requirements relating to village amenities; it created a head of power in the act so that regulations could be created that would require contracts to include or not include certain matters and clauses; and it also prohibited a certain number of fees and charges. That amendment bill encompassed a number of recommendations from the review and intended to achieve a higher level of transparency in village contracts, which is very important, by prescribing certain matters and clauses. The bill allowed payments to village operators to be released from trust once a resident was entitled to occupy the village unit, rather than when a resident takes up the occupancy, and it extended from two to three years the time frame within which a person could bring proceedings to court for an offence under the Retirement Villages Act. Those changes were enacted in 2012, followed by amendments to the regulations in 2014 and then in 2015, along with a major revision of the retirement villages code. A draft update of the code came out this year, and I will speak on that a bit more in a moment.
Very clearly, in 2012, people had the expectation that the second bill aimed at progressing the rest of the recommendations would be introduced in early 2013 after the state election. The recommended amendments in the second bill were meant to cover a number of more complex measures that would dramatically improve protections for residents, including refining definitions, the creation of a register of villages, changes to improve protection of residents’ financial interests and changes to village contracts. But, unfortunately, this bill never eventuated, and the desperate need for further reform remains. I am standing here to see whether we can get some progress on that.
In recent years, in 2016–17, 500 inquiries relating to retirement villages were made to consumer protection and 33 complaints were investigated. In 2017–18, 484 inquiries were made, resulting in 84 complaints being investigated. As at the end of the 2018 financial year, 40 per cent of these complaints had not been finalised. Concerningly, none of the investigations resulted in any formal disciplinary action. It is clear, however, that a pressing need for further action remains.
A letter that I received earlier this year from a constituent, Erica Evans, details her family’s experiences and provides a compelling example of the need for change. Ms Evans’ parents had to vacate their retirement village in late December in 2015 after her mother suffered a major stroke. In January 2016, the keys to their retirement unit were returned, and Ms Evans’ mother then passed away in December 2016 and her father died in August 2017.
Ms Evans’ parents’ retirement unit remains unsold after almost three years. Ms Evans has written to me, and I am quoting from her letter —
At a time in their lives when they deserve to enjoy their later years, our Elderly are entering into complicated contracts because they have been enticed into independent living downsizing and a brand new life. ...
They sell their family home, have a little cash behind them after paying taxes all their lives, raising families and in a lot of instances went to war for their country, and now they are starting a new phase of their lives and looking forward, with enthusiasm, to this new life with all the glamorous facilities, BUT they are not told what will happen when they exit the village.
No one considers that the person/s leaving the village, which was once their home, will probably have either died or will have to enter a nursing home.
If the option is a Nursing Home, the former resident/s will have to find a substantial amount of money for their bond.
It is such a stressful time. Trying to get a vacancy in a Nursing Home is difficult enough, let alone the issue of having to get the bond. If the former resident does not have a lot of money or they can’t get their refund back from the retirement village what do they do.
There is no option. They have to pay more. They have to pay approximately 6% or more on every dollar from the shortfall of the bond. This can add up to thousands of dollars paid during their time in the nursing home.
When challenging the management of our parents’ retirement village ... we have received nothing but rhetoric and excuses.
They set the sale price and high exit fees. They proudly promote that they have amazing sales credentials and yet they market the property at such unrealistic prices. The properties are priced for corporate greed. There is no hurry for a sale. Why should there be? They have our parents’ money and there is no time constraint.
The experience of the Evans family is not isolated and they are not alone in their distress. I note that in 2014, the Council on the Ageing WA also commissioned a report to expand upon the recommendations that were made as part of the 2010 review and to consider the extent to which these recommendations have been implemented and identify any gaps that remain. The key findings in that report included that there were problems with mismanagement and clashes with management and that legislation does not address quality control of management. The report called for the need for the strengthening of monitoring and enforcement functions to ensure legislative compliance. It also referred to the need for the establishment of an advocacy service of some description for residents of retirement villages in Western Australia. The report noted the discrepancy between the rights of the owner and the resident, which becomes particularly pronounced at the stage of a resident vacating the premises. The departing resident is generally in a far more precarious position than a departing tenant in a residential tenancy arrangement. The report also referred to the need for strengthening provisions around remarketing; the need for legislation governing the quantum of deferred management fees or exit fees that may be charged; and the need to bring the code, which is currently under the fair trading regulations, under the Retirement Villages Act to enable a standardised and more effective enforcement process.
In my recent meeting with representatives from the WA Retirement Village Residents Association, they too identified a list of key issues that are still outstanding many of which I am unsurprised to report are consistent with COTA’s work. WARVRA has specifically spoken about the need for reform around the issue of definitions. I note that this was also raised during the statutory review and it was always intended to be addressed as part of the second bill. We are talking about needing clarity around definitions, such as: Who is a resident? What makes a series of retirement units a retirement village? What is a retirement village scheme? We need to get some clear understanding of these sorts of things. WARVRA also said that the lack of clarity around definitions is also impacting on more granular issues such as whether painting is considered repairs or replacement maintenance or renovations. Something such as painting can present a considerable expense, particularly for a population group that, as I have already said, are largely living on fixed incomes. How it is defined will dictate who is responsible for incurring these sorts of costs and under what circumstances. It is very clear that clarity and reform in this space is urgently needed.
WARVRA is calling for an enforceable code of conduct. That is very similar to the findings within the COTA report. WARVRA has identified the crucial need for enforceable sanctions and penalties for operators who do not comply with the code of conduct. The need for an enforceable code was one of the most mentioned issues in the individual submissions that were made to me, with 10 out of the 23 submissions pointing out the difficulties of having a code if penalties are not attached to it. Some of the practical examples given to me include that whilst the code currently lists a range of items to be covered under the reserve fund, one resident told of the managers of their village simply choosing to ignore this requirement altogether without being subject to any form of penalty.
Similarly, another resident detailed a failure of management to provide quarterly and annual financial statements, despite the fact that that is required in the code and despite numerous requests. Others give accounts of managers failing to involve elected residents’ committees in the day-to-day operation or allowing input into the annual budget even though both are provided for in the code and the act. To facilitate greater enforceability, WARVRA is advocating to move the code of practice from the fair trading regulations to the Retirement Villages Regulations. WARVRA has also identified the need for an ombudsman to hear and resolve residents’ complaints. The Council on the Ageing Western Australia, while not specifically calling for an ombudsman, has made it very clear that there needs to be an independent arbiter or inspector or oversight to assist.
WARVRA also raised concerns with me about timely action by the Commissioner for Consumer Protection. Residents have reported excessive delays and a lack of communication in dealing with complaints and other issues referred to the commissioner. My questions in Parliament have revealed that 40 per cent of complaints that had investigations initiated during 2017–18 had still not been completed by the end of that financial year. Some residents are finding that staff simply do not have an adequate understanding of how a retirement village operates or is meant to operate. or that when procedures are in place, no-one is there to implement them. One 80-year-old resident finished off their submission to me about lengthy delays and complaints with the words, “I hope that I live long enough to see it out.” Oh, dear.
WARVRA has also raised concerns about the need for reform around duty of care issues. Legislative reform needs to ensure that administering bodies maintain a duty of care to their residents and this includes ensuring the requirement for full disclosure of costs and other obligations arising from entering into a contract. That includes whether construction warranties have expired. There should be a requirement for the maintenance of residential units and other facilities so that they remain fit for purpose.
Training of managers is an issue that is a huge concern. That is a really strong theme that has arisen from the submissions and my discussions with people. There is a strong view that all onsite village managers need to be required to undertake training before taking up the role of village manager. We should not take this matter lightly. A manager’s role is a very important role. During the 2017–18 financial year, 53 inquiries related to management or governance issues and concerns around that particular role. We are talking about one a week. There were 10 formal complaints about management or governance lodged with the Consumer Protection division during 2017–18. Going back to the 2014 COTA report, “Security of tenure for the ageing population in Western Australia”, it was found that one of the primary concerns of residents related to their circumstances in the village becoming untenable as a direct result of mismanagement and clashes with management, to the extent that some residents were at the point at which they would choose to leave their villages immediately and the only thing stopping them was that they did not have the money to do so. We are talking about people in their later years whose lives are being made pretty miserable.
There is huge concern about contracts, specifically around unconscionable contracting within this sector. If anyone has been paying attention to recent exposés in the media, they would be aware that Western Australia is not alone in having concerns about this growing industry. We have to recognise there is a stark power imbalance between the parties who enter into retirement village contracts. Unfortunately, the imbalance has meant that many residents, to date, have been left vulnerable to unfair conditions and they have been left with very little recourse. In 2017–18, 111 inquiries about contracts were made to the Consumer Protection division and 30 per cent of all complaints under investigation during 2017–18 related specifically to contract terms. I should point out that complaints are most likely to be invited or created when potential breaches of legislation are alleged. We know that the legislation is deficient. Practices that may be considered unfair by community standards may not become complaints because, at the moment, the legislation does not provide reasonable levels of protection. I want members to reflect on that. We talk about the number of cases that are already subject to investigations when there has potentially been a breach of the legislation, but there are goodness knows how many more people out there with no recourse whatsoever.
One resident described how, when moving into a retirement village, the keys are not produced until cheques or transfers are cleared, but when a resident leaves a village, payment may take years. This resident knows personally of two former residents who have moved to aged-care facilities but they are still required to pay daily fees over $100. Members, that is disgraceful! No-one can suggest that is a fair contractual situation.
The 2010 review did not support the introduction of a standard form contract, which I think is disappointing if members think about how useful standard form contracts have been for residential tenancies and sale of land, for example. Standard contracts mean that people can feel some confidence that even though they are entering into complex legal arrangements, there is some consistency in understanding what they are entering into. The rationale of the review not supporting standard form contracts was concern that the different types of residential arrangements in the industry did not lend themselves to them. However, that does not change the fact that there is still scope to simplify contracts and make them more accessible. Simply, they need to be simple and in plain English. The Western Australian Retirement Villages Residents Association proposes separating the financial agreement between the operator and the resident from the general rules applying to all residents in a village.
Debate adjourned, pursuant to standing orders.