What advice, if any, and from whom specifically, has the Associate Minister received on the nature of any financial benefit derived by retirement village operators from retaining outgoing residents’ capital, including but not limited to interest earnings, investment returns, reduced borrowing costs or working capital advantages?

Answer

As noted in the answer to question 33978 (2026), over the course of 2025 I received a range of advice from my officials at the Ministry regarding the repayment of retirement village residents’ capital sums. On 23 October 2025, I received advice from the Retirement Villages Association (RVA). This advice outlined how the retirement village model operates, where the proceeds from the occupation right agreement (ORA) of an incoming resident are used to fund the refurbishment of units, maintenance of communal facilities, subsidies for operational and aged care costs, and debt repayment. The RVA considered a maximum repayment timeframe would require operators to borrow large sums or hold significant capital reserves, and that this could negatively impact the retirement village and aged care sectors. On 27 July 2026, I received further advice from the RVA outlining the RVA’s views on the Government’s agreed changes to the Retirement Villages Act and outlining views of their members. RVA members have conveyed that mandatory repayments plus interest payments would require villages to hold or borrow more cash, which would strain cash flow and balance sheets. The combined effect of the changes would divert capital away from new aged-care projects and discourage investment. In turn, this would increase pressure on hospitals and taxpayers, and ultimately result in higher costs, reduced choice, and fewer services for residents.