Labour says it will change the law so that people who leave a retirement village, or the families of those who die in one, get their capital back within three months. The promise, made on Monday by leader Chris Hipkins, sets up one of the clearest dividing lines yet between Labour and the National-led government on an issue that touches tens of thousands of older New Zealanders.
Under the current rules an operator can hold on to a departed resident’s money until their unit is resold, a wait that can stretch out for a year or more while the former resident, or their estate, is left out of pocket. The government has its own fix in front of Parliament through the Retirement Villages Amendment Bill, which would force operators to pay interest after six months and refund the full amount within twelve months. Labour says twelve months is still far too long.
Speaking at an event attended by around a hundred residents and advocates, Hipkins said he understood how much pressure the delay puts on older people and their whanau. “I know how hard you have fought for this, and I also know how difficult it can be when someone is vacating a retirement village unit, and we don’t need to make that any harder, we should be aiming to make it easier,” he said.
The detail of Labour’s plan has been carried in a member’s bill in the name of seniors spokesperson Ingrid Leary. It would require operators to repay a resident’s capital within three months of them leaving, and to return ten per cent of the money within five working days. The idea is that a resident moving into hospital-level care, or a family settling an estate, would not have to wait the better part of a year before they could see any of the money tied up in the village.
The proposal lines up closely with what residents themselves have been asking for. A Consumer NZ petition carrying around forty thousand signatures has called for a three-month limit, and polling cited by the campaign found that 84 per cent of New Zealanders support a fixed repayment deadline and 83 per cent think residents should get their money back within three months or less.
Brian Peat, who heads the Retirement Village Residents Association, has been one of the loudest voices on the issue. He has previously described the prospect of a twelve-month wait as “completely unfair”, and he welcomed Labour’s stance, saying it was pleasing to see a major party commit to the shorter time frame. Residents have argued for months that an industry which markets itself on security and peace of mind should not be allowed to sit on a departed resident’s money while it finds a new buyer.
The operators see it differently. Seniors Minister Casey Costello, who is steering the government’s bill, has said a three-month deadline would be “very problematic”, particularly for smaller aged care providers who may not have the cash on hand to refund a resident before a unit is sold. The Retirement Villages Association, which represents operators, has pointed out that the average repayment already takes around seven to eight months, and its chief executive Michelle Palmer has warned that forcing money out the door faster could push up costs for the people still living in a village.
That tension sits at the heart of the debate. Retirement village contracts in New Zealand are usually structured as a licence to occupy rather than ownership of the unit, which means residents do not hold the title and cannot simply sell up and walk away with the proceeds. When they leave, they are repaid the price they paid in, minus a deferred management fee that can swallow twenty to thirty per cent of the original sum. The longer the refund takes, the longer that capital is unavailable to a family that may urgently need it to pay for rest home care.
The government has defended its twelve-month model as a balance between giving residents certainty and not tipping smaller operators into trouble. Ministers note that interest would start running after six months under their bill, which they say gives operators an incentive to move quickly without forcing an unrealistic deadline on the whole sector. Labour counters that interest on a slow refund is cold comfort to a ninety-year-old who needs the money now.
For voters, the two positions offer a fairly stark choice. Both main parties now accept that the open-ended status quo, where a refund can be held until a unit happens to sell, has to end. The fight is over how fast the money should move, and who carries the risk in the meantime, the resident or the operator. With the number of New Zealanders living in retirement villages climbing past fifty thousand and rising every year, it is an argument that reaches well beyond the people in the room on Monday.
It is also a reminder that retirement policy is shaping up as a live battleground heading into the 7 November election, alongside the parties’ competing pitches on KiwiSaver and the pension age. If you want to see where the parties stand on this and other issues before you vote, you can compare their positions using our voting tool.
Whether a three-month rule survives contact with the realities of a sector that says it cannot always find a buyer in time will depend on who forms the next government, and on whether the operators can make their cost argument stick. For now, residents have what they have wanted for a long time, a major party promising to put a hard limit on how long they can be kept waiting for their own money.
What do you think is fair, three months or twelve? Have you or a family member been caught waiting for a retirement village refund? Share your experience in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
Leave a Reply