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Why the Aged Care Royal Commission Needs to Investigate Nursing Home ‘Exit Fees’

Aged Care Royal Commission needs to probe unfair nursing home exit fees

Attwood Marshall Lawyers has called for the Aged Care Royal Commission to probe the use of “unconscionable” nursing home ‘exit fees’ which exploit the elderly and rob them of their life savings after they have passed away.

The firm has negotiated on behalf of dozens of elderly clients and beneficiaries to stop nursing homes from charging exorbitant ‘exit fees’, which can be as high as 40% of the initial purchase price of a home room or unit.

Wills and Estates lawyer, Debbie Sage, said the financial rort is typically only detected after an elderly person has died – much to the shock of bereaved beneficiaries – and needed to be investigated under the terms of reference in the upcoming Royal Commission.

“There’s no regulatory oversight of nursing home fees, or any regulation of nursing home ‘exit fees’, some of which are simply unconscionable – as high as 40% of the initial purchase price of a home or unit – and charged when a resident leaves or passes away,” Ms Sage said.

“In addition to ‘exit fees’, some aged care facilities also charge ‘refurbishment fees’ to renovate or ‘modernise’ rooms or units for the next person to move in. In many instances these ‘refurbishment fees’ are grossly unfair.”

A recent Attwood Marshall Lawyers negotiation led to significantly reduced costs for an elderly Gold Coast woman who wanted to move into a facility with her dog.

Her ‘exit fees’, before negotiation, were in excess of $90,000.00 for one year of occupation, and $150,000.00 if she occupied her unit for two years or more.

In a Northern NSW case, an aged care facility told Attwood Marshall Lawyers an exit fee of $20,000.00 was owed to refurbish a kitchen, carpets, wall paint and blinds.

As the executor, Attwood Marshall Lawyers refused, with tradesmen completing the works at $8,000.00 instead.

“These horror stories show that a Royal Commission into the aged care sector is clearly long overdue,” Ms Sage said.

Attwood Marshall Lawyers will make a public submission into the proposed terms of reference for the Aged Care Royal Commission, calling for a review of ‘exit fees’, ‘refurbishment fees’ and ‘extra services charges’.

“Elderly people are vulnerable – some have dementia or other illnesses which prevent them from making considered decisions – this can lead to exploitation of their life savings,” Ms Sage said.

“Based on years of experience in the Aged Care sector, we recommend a full review of ‘exit fees’, ‘refurbishment fees’, and ‘extra services charges’, so older Australians can be assured they are given a fair deal.

“Many elderly clients have signed complex nursing home contracts or leases without legal advice, and are urged to do so by some unscrupulous proprietors.

“It should be mandatory that elderly people obtain proper legal advice before signing or entering into these agreements.

“It is also critical mandatory staff-to-patient ratios, publically accessible performance data, and a complaints authority or ombudsman are implemented, and that no recommended reforms are swept under the rug.

“The Aged Care sector must be made accountable – we need to increase the standard of care for our older generation.”

Public submissions into the proposed terms of reference for the Aged Care Royal Commission close on September 25, 2018 at: https://consultations.health.gov.au/aged-care-policy-and-regulation/terms-of-reference/

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Debbie Sage

Debbie Sage

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  • Wills and Estates
  • Direct line: 02 6670 1006
  • Mobile: 0421 666 663
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