Consumer NZ slams government’s retirement village announcement

Consumer NZ says the government’s decision to set a nine-month deadline for retirement villages to repay residents shows it has caved to business lobbying.

At present, there is no deadline for retirement villages to pay back residents who are leaving. The government initially announced it would introduce a 12-month deadline, while Consumer has advocated strongly for a deadline of three months.

“More than 41,000 people signed our petition calling for a three-month repayment timeframe for all residents leaving a village,” says Consumer chief executive Jon Duffy.

“The retirement village sector is a multi-billion-dollar industry. The government has effectively ignored the voice of the people in favour of big business.

“At first glance, setting a nine-month repayment period appears to be progress, when compared with the initial proposal of 12 months. But this is equivalent to putting a ribbon on a donkey and calling it a stallion.”

Consumer is concerned that villages will treat the nine-month repayment timeframe as a target, rather than striving to pay exiting residents back as soon as possible. In practice, this could result in worse outcomes for residents than under the existing system.

“Currently, most exiting residents are repaid within seven to eight months, which shows the sector can move quicker than what the government is proposing,” Duffy says.

“Today’s announcement risks most residents waiting for nine months. We think this announcement will lead to more people waiting longer to get their own money back.”

Earlier this year, Consumer’s petition was accepted by Ingrid Leary, Labour spokesperson for seniors. At that time, Labour leader Chris Hipkins announced that if elected, Labour would change the law to ensure all retirement village residents would get their money back within three months of departure, and that the law changes would apply to all existing residents and contracts – not just future ones.

“Labour laid down the gauntlet, and the current government failed to pick it up,” Duffy says. “Today’s announcement will cost our retirement village residents, future and present.”