{"id":3640,"date":"2023-03-01T06:42:00","date_gmt":"2023-02-28T19:42:00","guid":{"rendered":"https:\/\/onthecoastpublications.com.au\/onthecoastover55\/?p=3640"},"modified":"2025-08-06T12:07:04","modified_gmt":"2025-08-06T02:07:04","slug":"retirement-village-vs-residential-care-financial-difference-central-coast","status":"publish","type":"post","link":"https:\/\/onthecoastpublications.com.au\/onthecoastover55\/retirement-village-vs-residential-care-financial-difference-central-coast\/","title":{"rendered":"Retirement Village vs Residential Care: What’s the Financial Difference?"},"content":{"rendered":"\n

By Sophie Doyle, Retirement and Aged care specialist<\/strong><\/p>\n\n\n\n

Sophie Doyle | Erina | Morgans<\/a><\/p>\n\n\n\n

Retirement village living and residential care are often seen as alternatives, but the fact is they are not true substitutes. It is like comparing apples with oranges, the style of living, the services provided as well as what the government will subsidise (and regulate) are different.<\/p>\n\n\n\n

Residential care combines accommodation and full\u2013time daily living support. The costs are split between the resident and government through a complex set of subsidies and means testing. Care standards and fees are regulated by the Federal Government, with uniform rules across Australia.<\/p>\n\n\n\n

In comparison, retirement villages are generally independent\u2013living communities but for an extra fee, you may be able to buy additional care services. Retirement villages are regulated under state legislation, so the rules vary from state to state. The costs of a retirement village are private commercial contracts and each village operator can set their own fee levels and structure. It is important to read and understand the contract and ensure you have sufficient financial resources.<\/p>\n\n\n\n

How is your pension affected?<\/strong>
Eligibility for an age pension is means\u2013tested. If you own your home, it is an exempt asset, but in a retirement village, your name is usually not on the title deed. Instead, the rules for determining whether you are a homeowner or not depend on how much you pay as an entry contribution.<\/p>\n\n\n\n

If you pay more than a threshold amount as your entry contribution, you will be classified as a homeowner and the amount paid is an exempt asset. If you pay less than this amount, you are a non\u2013homeowner and the amount paid is assessable but against a higher threshold level.<\/p>\n\n\n\n

One trap to look out for, is the difference between a retirement village and a land lease community where you do own the building and lease the land it sits on. For Centrelink this is an important distinction as you are always classified as a homeowner in a land lease community regardless of the entry cost.<\/p>\n\n\n\n

Check your affordability<\/strong>
The decision on whether to move into a retirement village or residential aged care, is based on suitability to meet your day\u2013to\u2013day needs as well as financial affordability. It is important to consider: <\/p>\n\n\n\n