Getting your head around the retirement living ‘Wordle’

Are you finding the terminology of retirement living options and aged care confusing? Trying to get your head around some of the abbreviations you need to know is not quite Wordle, but sometimes can be just as challenging.

Don’t feel confused. Here’s some terms you might come across:

ACAT: Aged Care Assessment Team. The team you need to know. ACAT is dedicated to determining your best care options – at home or in care.

DAP: Daily Accommodation Payment. This is the payment for aged care accommodation. It is paid fortnightly or monthly and is non-refundable.

DMF: Deferred Management Fee. This occurs in most retirement villages and is often also called the exit fee. This is often misunderstood and is, in a sense, a deferred purchase cost. The DMF helps the retirement village pay for building all the community facilities you enjoy (pools, sports facilities, community rooms). Generally, when you enter a retirement living complex, your purchase price is cheaper than relative values in the area. The DMF is paid upon exit, and is a percentage of either your purchase price or sale price (depending on the particular village contract). Usually, it is relative to the time you’ve been there. The DMF is often confusing and varies from contract to contract. So, seek the advice of a specialist lawyer before signing.

GSC: General Services Charge. This is payable to the village operator for the day-to-day costs of management and administration, gardening, minor maintenance, recreation and entertainment facilities.

ILU: Independent Living Unit. In the retirement village, these are accommodation units/villas where people largely look after themselves, though usually some help is available (at a cost).

PEXA: Property Exchange Australia. Until recently, all transactions in relation to land existed in a paper world. A settlement involved meeting in a room and passing transfer and other documents around in exchange for bank cheques. No longer. Now, transactions occur in an electronic environment called Pexa. While retirement villages and over-50s resorts aren’t strictly Pexa transactions, when there’s a sale of a home to fund the purchase (as occurs most of the time), then the payments can be processed through the Pexa system.

RAD: Refundable Accommodation Deposit. This is paid in part or in full upon entrance to an aged care facility and is refunded upon exit (after deductions).

The DAP and the RAD can occur separately, or together. Aged care entrants can pay a full RAD, a part-RAD/part-DAP, or full DAP.

RTO: Right To Occupy. Usually in retirement villages, you purchase a right to occupy. You don’t own the property. Often the RTO is referred to  as a lease or licence.

SA: Serviced Apartment. Some villages offer an in-between option where there’s a degree of independence, but some support (food or cleaning) is available.

LTD: Living The Dream. What we all  hope for.

Retirement living and aged care law is complex. Contracts, while having some standard clauses through government requirements, vary significantly between village and village.

Legal and financial advice prior to signing, or at least during any ‘cooling off’ period, is essential.

 Sunshine Coast Elder Law are experts in retirement village and aged care contracts. Contact Don or Lesa Macpherson on 1800 328 952 for individually tailored specialist advice. You can find out more at sunshinecoastelderlaw.com.au or brisbaneelderlaw.com.au