Not everyone is happy when retirement village weekly fees rise. Photo / supplied
Not everyone is happy when retirement village weekly fees rise. Photo / supplied
Elderly residents of a Coromandel retirement village were told this month of a proposed 47 per cent fee rise in the next two years - one of the largest in New Zealand.
Residents in 14 two-bedroom duplex-style units at Willson Gardens, Moana House and Village, Whangamata were told last Wednesdayof the fee jump next year and the following.
General manager Vivian Blake told residents via email on July 20 that fees would go from $107.77/week to $158.73/week.
"The current weekly fee for the 14 units is $107.77. The updated weekly fee is $158.73 – a difference of $50.96 per week," Blake wrote.
"Our newly appointed part-time accountant (Kaye) has this week carried out a thorough analysis of the fees...The previous calculation used actuals for the 11 months to end May 2022 and extrapolated those out to the full year to arrive at the figure of $160.73. Kaye has taken the full 12-month actuals to end June to arrive at the updated figure."
Proposed fees for residents of a further five apartments appeared on a spreadsheet at a higher figure of $178.01/week.
Blake indicated that the size of the fee rise had been met with negative feedback. So she proposed a way to smooth the change.
"Having considered the quantum of the increase and your collective comments, we have agreed that for the 2022/23 year the Willson Gardens residents pay half of the increased weekly amount, ie $25.48 and in the 2023/24 year the balance of the weekly increase is applied, ie $25.48."
Blake told the Herald she could not comment about the amount the fees would increase but said they had not risen for seven years.
Questions should go to Jan Signal of Covenant Trustee, Blake said. Signal said nothing was decided: "It's under consultation. That's as far as it's gone."
At least one resident has expressed alarm at the fee rise.
Graham Wilkinson of the Retirement Villages Association. Photo / supplied
Graham Wilkinson, president of the Retirement Villages Association which represents owner/operators, said Willson Gardens was a small village.
"It is a charitable trust set up to ensure local people in the area could access care without having to move away because no large for-profit organisation would wish to build there. It is the sort of entity that will need to have some exemptions from any mandate around fixed fees, ceasing fees on vacation and the like."
Special treatment would be needed due to its size and unique financial circumstances, he said.
Fees would only rise 23.5 per cent this year, he said, but further next year, he acknowledged.
"This is obviously due to increased costs around their call system and with only 18 units in the village, it is inevitable. But even then, the total cost for the current year is still relatively modest at around $133 and next year it will increase. The size of the village simply does not allow for anything else," Wilkinson said.
Nigel Matthews, a consultant of Aged Advisor, said it didn't sound like Willson Gardens was consulting.
It sounded more like those were the new fees given the tone of the email which went out around midnight - hours before a residents' meeting, he said. He knows of concerned residents and said the Retirement Villages Residents Association was worried.
"We're concerned about weekly fee increases for residents who are not on fixed or Consumer Price Index-linked fees. Once they're in a village, it can be financially impossible for them to move out if things like weekly fees change," Matthews said.
The 47 per cent rise was the highest fee rise of any village he knows of in New Zealand.
Most national retirement village chains set weekly fees "for life" once residents buy a licence to occupy a villa, apartment or townhouse.
Summerset at Heritage Park at Ellerslie. Photo / supplied
Summerset Group is unusual in the larger listed companies: it does not fix its fees for life once residents buy a licence. On July 1, it increased weekly fees for thousands of residents by 5 per cent.
"It's not a decision we take lightly but, like almost every other New Zealand business, we've seen a huge increase in our costs and we had to adjust our fees accordingly," a Summerset spokesman said.
"We are not passing on all our cost increases. Summerset will absorb some of the increases."
Residents were told about the weekly fees and the fact they could rise annually before they bought a licence, he said.
"Our commitment is to never make our annual increase higher than the increase to superannuation. This year's super increase was 5.9 per cent from April 1. To put this in context, our average increase was $7/ week, while superannuation went up $25/week for a single living alone and $40/week for a couple, he said.
Weekly fees cover gardens and grounds, maintenance and repair of the village, council rates, water charges, village insurance, call bell monitoring and response, staff, events such as happy hours and overall management.
"With inflation and other cost changes, pretty much all of these expenses have increased this year," the Summerset spokesman said.
"The weekly fee is set according to the running costs of each village and is topped up by Summerset because [resident payments] do not fully cover all village's running costs. Of course not all our residents are happy with a change to their fees but we've not received any more feedback this year than any other time we've changed our fees," he said.
Paula Bishop of the Village Guide publication said that they did not publish weekly fees: "It is hard to keep this information updated and therefore accurate. Although many villages do have fixed fees, they do still change over time for new residents. Sales managers prefer to talk through fees at the point of inquiry rather than having them displayed on our website."
The Herald has reported on what consumers should ask about before buying a licence. That mentioned that weekly fees are fixed on arrival for residents at Ryman Healthcare, Oceania Healthcare, Metlifecare and Arvida Group.
