Transitioning from a retirement village to residential aged care can be a complex process, especially when it comes to understanding the financial aspects. In this article, we focus on exit entitlements and aged care RAD (Refundable Accommodation Deposit) funding for residents in Victoria. We will provide an overview of these important aspects, ensuring a smooth transition and helping you make informed decisions.
Exit Entitlements in Victoria
In Victoria, exit entitlements are regulated by the Retirement Villages Act 1986 and the Retirement Villages (Contractual Arrangements) Regulations 2017. When you leave a retirement village, your contract may entitle you to a payment, which is generally calculated as follows:
- Your original ingoing contribution minus any fees owed to the retirement village operator, or
- The next ingoing contribution received by the operator minus any fees owed.
For contracts signed after 1 August 2006, different rules apply to the timing of exit entitlements. If the retirement village unit has not changed hands, the exit entitlement is calculated based on an independent valuation, with the cost shared by the resident and the village operator.
Aged Care RAD Funding in Victoria
Aged care costs in Victoria are regulated by the Commonwealth Government. If a non-owner resident moves to an aged care facility, the retirement village operator may be required to fund their Daily Accommodation Payments (DAPs) or Refundable Accommodation Deposit (RAD).
The operator’s obligation to fund aged care payments depends on when the resident signed their retirement village contract (before or after 30 July 2017). The operator is required to fund up to a maximum of 85% of the estimated exit entitlement, with the funded amount deducted when the exit entitlement is paid.
Key Takeaways for Victorian Retirement Village Residents
Understanding exit entitlements and aged care RAD funding is crucial for Victorian retirement village residents transitioning to residential aged care. It’s essential to be familiar with your rights and obligations under the Retirement Villages Act and the relevant regulations.
If you need assistance navigating the complexities of exit entitlements and aged care funding, our team of experienced financial advisors can help. We specialise in retirement village financial advice and aged care financial planning to ensure a smooth transition for you and your loved ones.
