Andrew Dickens: It's time for the Government to back our seniors

Pensioners marched on Parliament yesterday, demanding that politicians remember them.  

And one of the biggest things on their mind is the rules around retirement villages.

Here’s an example:

A couple had been in their retirement village for 10 years. Needing more care, they decide to move out and find a more appropriate place to live.  

They’d bought their villa for $600,000, but under the current situation they’ll get just $400,000 of that money back. So, no capital gain at all. 

The village is then free to on sell the villa say for $1.2 million, and they don’t have to pay the couples $400,000 back until they find some to take over the licence. In some cases that may take two years. 

So, no capital gain, in fact a loss, and then no funds at all in the bank until the village decides to re-licence 

The only way a village works for you is if you stay in it until the day you die. But you will not be passing on any capital gains to your kids, you’re going to lose half your capital.  

That’s the deal. 

Labour’s Ingrid Leary promised to do something about this but lost the mandate. 

Now the Government continues to say they support our seniors, and they are also railing against taxes on capital gains. 

But our seniors are being hit with a defacto capital gains tax that far exceeds anything Labour has suggested. 

I think it may be time to walk the walk that you’ve been walking and talking but not doing. Let’s not ruin our seniors' last days by taking too much of the money they spent their whole life working to have. 

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Episode Transcript

Speaker 1 (00:00):
Yesterday, pension has marched on Parliament demanding that politicians remember them.
It wasn't covered on the one news and I don't
know why. Actually I do know why. Doesn't surprise me anyway.
But what were they worried about. Well, one of the
biggest things on their mind is the rules around retirement villages.
And here is an example that has been quoted about
a couple who've been in a retirement village for ten years,

(00:21):
but they realized that they needed more care, so they
decided to move out and find a more appropriate place
to live. Now back in the day, ten years beforehand,
they bought their villa for six hundred thousand dollars, but
under the current situation, they'll only get four hundred thousand
dollars of that money back, so no capital gain at all.
The village is then free to on sell the villa,
which is now valued at one point two million, and

(00:44):
they don't have to pay the couples four hundred thousand
dollars back until they find someone to take over the license.
Sometimes that can take up to two years. So the
couple bought a six hundred thousand dollars house that's being
sold by the village for one point two million, and
all the couple get is four hundred grand and it
may take two years. That's harsh, right, No capital gain

(01:04):
in fact a loss, no funds at all on the
bank until the village decides to relcense. The only way
a village works for you is if you stay in
it till the day you die. But you will not
be passing on any capital gains to your kids. You're
going to lose half your capital at least. That is
the deal, and that's the way it's been running for
a while now. Back in the day, Labour's Ingrid Leary

(01:24):
promised to do something about this, but of course they
lost the election. Now the government continues to say they
support our seniors. They also say they're railing against taxes
on capital gains, but nothing's really been happening. Our seniors
are being hit with basically a de facto capital gains
tax that far exceeds anything Labor has suggested. So I
think it might be time for the current government to

(01:45):
walk the walk that you've been walking and talk the
talk that you've been talking but also not doing. Let's
do something about it. Let's not ruin our seniors last
days by taking too much of the money they spent
their whole life working to have. For more from Early
Edition with Ryan Bridge. Listen live to News Talks at

(02:07):
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