A woman refunded after an aged-care facility unlawfully charged for her husband's "premium" room believes other Kiwis will be owed thousands of dollars.

Consumer NZ has fielded similar complaints about the extra charges and is concerned costly premium rooms are being misrepresented.

And the Commission for Financial Capability will investigate after a surge in the number of elderly surprised by financial fish hooks relating to the move from a retirement village unit to rest-home care.

So-called "premium" rest-home and aged-care rooms can range in cost from $50 to more than $400 a week for extras such as an en suite or garden access.

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If a facility has no standard rooms available it can require a new resident to pay for a premium room only if occupancy is 90 per cent or higher, and it has found a provider within 10km that has a standard room available.

Those rules still cover facilities that only have premium rooms. The process must be clearly detailed in the resident's admission agreement.

Ruth Schumann is urging all residents or their families to check their paperwork, after she was refunded following her husband Dennis' stay in Northbridge in Northcote.

Dennis now has late-stage dementia after being first diagnosed in 2011, aged 62. He was admitted to Northbridge's 15-room dementia wing in January 2017, where he stayed for three months. All rooms in the wing had an en suite, and Schumann said when signing the contract she was only told there was a charge of $400 a month "for the bathroom".

When she realised the home hadn't properly recorded consent for the charge in the admission agreement she complained to Waitemata DHB. It substantiated the complaint and told Schumann Northbridge would make changes to its admission agreements.

"It is acknowledged that many new facilities are applying premium room charges to their rooms," the DHB told Schumann. "[We] will work with all Waitemata facilities to ensure they have a full understanding of their obligation regarding the application of additional service charges."

In October last year Northbridge Lifecare Trust emailed Schumann to say it would refund $1200 on a "without prejudice" basis.

Ruth Schumann believes many others will be wrongly charged for premium rooms. Photo / Dean Purcell
Ruth Schumann believes many others will be wrongly charged for premium rooms. Photo / Dean Purcell

James Jordan, director of the not-for-profit Northbridge Lifecare Trust, said he was unable to comment on any aspects of Schumann's case: "I confirm we have not had any other issues with premium room rates".

Schumann believes it's likely people in other facilities are being wrongly charged. Many would be unaware of their rights, or in no position to complain.

"Everybody who has a family member who is in aged care should look at their contracts, if they are paying extra charges."

Consumer NZ head of research Jessica Wilson said it had concerns about premium rooms being misrepresented, including the false impression they provide a higher level of care. The charges were a growing revenue stream for homes.

"Among the problems raised with us is that rest homes may promote premium rooms as the best or only option available, without telling consumers about the conditions regarding charging for these rooms."

A growing number of villages have rest-home care onsite, with many using this "continuum of care" in marketing.

There can be confusion when a decline in health causes village residents to move into a rest home, which operates under separate regulatory and funding models. New charges can run down estates.

Most villages don't pay out on a unit until after it has been leased to someone new, for example, which can take months. Weekly fees, which cover rates, maintenance and insurance, can also be charged after a person has left a retirement village unit, until it has been re-leased.

Roughly 20,300 rest-home beds are in facilities within retirement villages – about 53 per cent of the total aged-care sector's bed count, and an increase from 46 per cent in 2015.

That trend has seen more queries to the Commission for Financial Capability, headed by Retirement Commissioner Diane Maxwell, including on premium room charges.

Its national manager for retirement villages, Troy Churton, in May met with Ministry of Health officials to discuss how the village to rest-home transition could be clarified for the public. As a next step, the commission will study the overlap between villages and rest homes, and make recommendations.

"Premium" rest home rooms – the rules

• If no standard rooms are available a new resident can be charged for a premium room only if occupancy at the facility (rest home, hospital or dementia) is 90 per cent or more, and it has found another facility within 10km with standard rooms available.

• If the above conditions aren't met the provider must admit the resident and must not charge extra for a premium room.