Are you ready to decide?

Planning living arrangements for retirement and beyond

Whether you are planning your retirement, considering what care you may require in the future or helping a loved one who has become frail and is unable to live independently, the decision to sell and move out of the ‘family home’ is emotional and may be overwhelming.

The right option is dependent on the health, wellbeing, welfare and safety needs and wants of the individual which should always be of paramount concern to all those involved in the decision making process.

The most common types of living arrangements that are considered are Retirement Villages and/or (depending on the care requirements of the individual) Aged Care Facilities such as hostels (that provide low level of care) or nursing homes (that provide a high level of care).

However, there are other options that may be considered by the elder person and/or their family. These options may include the elder person moving in with family or friends (whether this be into a ready built space in their home or following the construction of a granny flat) or to have ‘in-home’ services.

The decision is often compounded with the legal and financial issues associated with the options available for elder living arrangements. It is important that a clear understanding of what rights and obligations are attached to the various types of arrangements.

Below is a general overview of the various living arrangements that may be considered:

Aged Care Facilities – Low and High levels of care

Aged Care Facilities are administered under the Aged Care Act 1997 (ACA). The ACA generally governs the rights and obligations of residents and care providers, contractual commitments and formation, quality of care, security of tenure and processes in entering into facilities (including the manner in which payments are to be made, etc).

Primarily, before anyone can reside in an aged care facility, an applicant must be assessed by an Aged Care Assessment Team (‘ACAT’). ACAT can be reached through the Department of Health and are attached to most hospitals throughout Australia. It is a requirement for a current ACAT assessment to be carried out prior to entering into any aged care facility. All facilities require an ACAT number before considering any applications for residency by an elder person. The decision about when to arrange for an ACAT assessment should not be ‘put off’ as it may take some time before the assessment can be carried out and the appropriate facility with the level of care required for the applicant to be sought.

The ACAT assessment will enable a facility to determine whether or not it is able to provide the care required for the elder person. Generally, there are two levels of care offered by differing facility. One being termed ‘low care’ which is usually provided by hostel facilities and the other being termed ‘high care’ which is usually provided by nursing home facilities.

Retirement Villages

Retirement Villages provide a community style of independent living. Villages are governed under the Retirement Villages Act 1999 (‘RVA’) which generally governs rights of residents, obligations of Village Operators, requirements for village documentation, including disclosure requirements, settling in periods, cooling off rights, just to highlight a few.

There are various types of contractual arrangements that may apply when buying into a Retirement Village, including leasehold, strata title, loan, company title and attached to these are service contracts required by the Village Operators.

It is strongly advisable that anyone contemplating to enter into a Retirement Village, they should seek legal and/or financial advice in connection with all documentation required for the purchase into the Retirement Village.

In-Home Services

As an alternative to residing in an Aged Care Facility and depending on the elder person’s ability to live independently, they may wish to reside in their existing residence (or a smaller residence) with the assistance of nurses, therapists, food preparation services, cleaning services, etc.

A word of caution: It is important to ensure thorough background checks are conducted and accreditation supported (where possible) when contracting in-home service providers particularly to ensure the elder person’s welfare and assets are secure.

Living with family/friends

There are many various reasons why an elder person may reside with family and/or friends as opposed to living in an Aged Care Facility. Often it is as a consequence of culture, family pressure, compassion, and willingness. Whatever the reasoning, it is important to consider what level of care can be provided by the family and/or friends and what care may be required in the future.

There have been many cases where an elder person has resided with family or friends and relationships have become strained, financial security for the elder person has diminished and/or underlying illegitimate intentions have been overshadowed by a need for care.

In the case of Morris v Morris NSW SC MacLelland J in Eq., (1982) NSWLR 61, the elder person, a father, sold his unit to live with his only son who was married with two children. It was suggested that the proceeds of the elder person’s unit would go towards the construction of a second storey extension to the son’s house which would then be occupied by the father. There was no discussion of the living arrangements or what would happen if the relationship of the son and daughter-in-law broke down or they simply just wanted to sell the house. The son’s relationship with the daughter-in-law did in fact break down requiring the house to be sold. The elder person was left with a legal battle to recover the capital he paid towards the son’s house for the extension.

This case has been applied, considered and cited on many occasions.

Communication is the key to circumvent any issues that may arise in any sort of living arrangement. It is strongly advisable to ensure that, even if it is considered that the family relationship will prevail over any other circumstance, before the elder person sells their existing home with the intention to move in with family and/or friends, that a written agreement is put in place amicably outlining the intention of all parties concerned. The agreement should be written by a legal professional and include provisions such as the needs, rights and obligations of each party, privacy concerns, living arrangements, dignity issues, consequences of relationship break down, the possibility of the sale of the property concerned, and, how any capital contributed by the elder person into the family/friends home will be dealt with (especially if there are other beneficiaries under the elder person’s Will).

If you require legal advice about any or all of the various types of living arrangements for yourself or a family member, contact Leonie of Status Conveyancing on phone 8759 5120 or 0433 201 207.

Article prepared by:

Leonie Blazey | LLB, JP | Licensed Conveyancer (# 05004433)

P : 8759 5120 / 0433 207 201 | : [email protected] | :

David Sayer trading as ‘Status Conveyancing’ (ABN: 23 474 546 912)

This article provides basic information only and is not intended to be a substitute for legal advice. You should obtain legal advice about your particular situation.