Troy Churton, former National Retirement Village Manager for the Financial Capacity Commission, shares suggestions on factors to consider. Video / NZ Herald
This month, seniors in a Coromandel retirement village were told of a proposed 47% rate hike over 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 last Wednesday were notified of next and next year’s rate jump.
On July 20, General Manager Vivian Blake told residents via email that fees would go from $ 107.77 per week to $ 158.73 per week.
“The current weekly rate for the 14 units is $ 107.77. The updated weekly rate is $ 158.73, a difference of $ 50.96 per week,” Blake wrote.
“Our newly appointed part-time accountant (Kaye) did an in-depth commission analysis this week … The previous calculation used actual data for the 11 months to the end of May 2022 and extrapolated those for the full year to get to the $ 160.73 figure. Kaye took all actual 12-month data through the end of June to get the updated figure. “
The proposed rates for residents of five other apartments appeared on a spreadsheet at a higher figure of $ 178.01 per week.
Blake indicated that the scale of the commission increase was met with negative feedback. He then he proposed a way to smooth out the change.
“After considering the quantum of the increase and your collective comments, we have agreed that for the year 2022/23 the residents of Willson Gardens pay half of the increased weekly amount, which is $ 25.48 and in the year 2023/24 the balance of the weekly increase is applied, which is $ 25.48. “
Blake told the Herald he couldn’t comment on the amount the taxes would increase, but said they hadn’t increased for seven years.
Questions should go to Covenant Trustee’s Jan Signal, Blake said. Signal said nothing was decided: “He is in consultation. This is where he went.”
At least one resident has expressed alarm over the tax increase.
Graham Wilkinson, president of the Retirement Villages Association representing the owner / operators, said Willson Gardens was a small village.
“This is a charity fund set up to ensure that the local people in the area can access treatment without having to relocate because no large for-profit organization would want to build there. It is the type of entity that will have to have some exemptions from any mandate. on fixed rates, termination of holiday taxes and the like. “
Special treatment would be needed due to its size and unique financial circumstances, he said.
Fees would only increase 23.5% this year, he said, but next year, he acknowledged.
“This is obviously due to the increased costs around their calling 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 doesn’t allow for anything else, “Wilkinson said.
Nigel Matthews, an Aged Advisor consultant, said it didn’t look like Willson Gardens was consulting.
It felt more like those were the new rates given the tone of the email that came out around midnight, hours before a residents’ meeting, he said. She knows the concerned residents and said the Rest Village Residents’ Association was concerned.
“We are concerned about weekly rate increases for residents who do not pay fixed or CPI-related rates. Once they are in a village, it can be financially impossible for them to relocate if things like weekly rates change. “said Matteo.
The 47% increase was the highest tax increase of any village I know of in New Zealand.
Most national retirement village chains set weekly “lifetime” rates once residents purchase a license to occupy a villa, apartment, or townhouse.
Summerset Group is unusual in larger publicly traded companies – it does not set its lifetime rates once residents purchase a license. On July 1, he raised weekly taxes for thousands of residents by 5%.
“This is not a decision we take lightly but, like almost all other New Zealand businesses, we have seen a huge increase in our costs and have had to adjust our rates accordingly,” a Summerset spokesperson said.
“We are not passing on all of our cost increases. Summerset will absorb some of the increases.”
Residents were told about the weekly fees and that they could increase each year before purchasing a license, he said.
“Our commitment is to never make our annual increase higher than the pension increase. This year’s super increase has been 5.9% since April 1. To put this into context, our average increase is was $ 7 a week, while the pension increased by $ 25 a week for a single living alone and $ 40 a week for a couple, he said.
Weekly rates cover gardens and land, village maintenance and repair, council rates, water charges, village insurance, doorbell monitoring and response, staff, events such as happy hour and general management.
“With inflation and other changes in costs, virtually all of these expenses have increased this year,” the Summerset spokesperson said.
“The weekly rate is set based on the running costs of each village and is recharged by Summerset because [resident payments] they do not fully cover the running costs of the village.
Of course, not all of our residents are happy with a change in their rates, but we haven’t received more feedback this year than any other time we’ve changed our rates, ”he said.
Paula Bishop of the Village Guide publication said they did not publish weekly rates: “It is difficult to keep this information up to date and therefore accurate. Although many villages have fixed rates, they still change over time for new residents. Sales managers prefer to talk about rates. at the time of the request rather than displaying them on our website. “
The herald has reported what consumers should ask before purchasing a license. This said weekly rates are fixed on arrival for residents of Ryman Healthcare, Oceania Healthcare, Metlifecare, and Arvida Group.
Rest village weekly rate increase alert: Coromandel residents face a 47% increase in 2 years
SourceRest village weekly rate increase alert: Coromandel residents face a 47% increase in 2 years