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An exit entitlement is the amount of money a resident gets back when they leave a retirement village. This amount is based on the terms in their residence contract (subject to the Act). It can include deductions for things like fees, refurbishment costs, and other agreed charges.
When an operator must pay an exit entitlement
Operators must pay a resident’s exit entitlement within the following timeframes (whichever occurs first):
Standard payment
Pay the exit entitlement within 10 business days after you receive the ingoing contribution from the next resident.
Maximum period
If the residence is not relicensed, pay the exit entitlement no more than 12 months after the following criteria are both met:
- the resident has delivered vacant possession of the residence to the operator AND
- a period of 30 days has elapsed from the day the resident delivered vacant possession.
Earlier payment
The operator and the resident can agree to an earlier payment. In some cases, an earlier repayment period may be included in the residence contract.
Extensions
An operator can apply to the South Australian Civil and Administrative Tribunal (SACAT) for more time if there are special circumstances.
Capital fund contributions deducted from exit entitlement
An operator may deduct an amount from the resident’s exit entitlement as a contribution to a capital fund when they leave the village where this is specified in the residence contract.
For contracts entered into before 2 February 2026, the amount that can be deducted must not exceed an amount that is 12.5% of the current market value of the residence.
For contracts entered into on or after the 2 February 2026, the amount that can be deducted must not exceed the lesser of the following:
- 1% of the current market value of the residence, multiplied by the number of years (including any part year) of occupation or
- 12.5% of the current market value of the residence.
This is a cap on the amount that can be deducted. If the residence contract provides for a lesser amount to be deducted, then the lesser amount will apply.
Failure to comply can lead to penalties of up to $35,000.
Operators’ responsibilities
- If an operator deducts an amount from a resident’s exit entitlement for a capital fund contribution, they must:
- Pay that amount into the relevant fund or account within 10 business days of making the deduction.
- If the residence will not be subject to another residence contract, pay the amount before the end of the financial year or before another person moves in.
- Operators must keep a record of any outstanding payments.
- Operators must identify these payments in any financial statements prepared under section 33 or section 40 of the Act.
Liability for recurrent charges
When a resident leaves a retirement village, the operator becomes responsible for paying any recurrent and other charges (such as council and water rates) for the vacated residence. These charges cover costs such as maintenance and services.
Operator responsibilities
- An operator can recover these charges from the resident’s exit entitlement, but only:
- when the exit entitlement is due to be paid
- up to the amount of the exit entitlement
- for a maximum of 6 months after the resident leaves, or until the residence is relicensed or occupied by another resident - whichever happens first.
- An operator cannot increase other residents’ charges to cover these costs.
- Keep records of any outstanding payments and include them in financial statements.
- Make all outstanding payments before another person moves into the residence.
When a resident moves into residential aged care
If a resident is moving into residential aged care and they meet the eligibility requirements, they can apply to have the retirement village operator make payments to the aged care facility on their behalf. These payments can be deducted from the exit entitlement.
Eligibility criteria for payment
A resident is eligible for the operator to make payments to the aged care facility on their behalf when certain conditions in their residence contract or the law are met. The resident must:
- be approved under the Aged Care Act 2024 (Cth) to enter residential care at a facility run by an approved provider
- choose to pay a Refundable Accommodation Deposit (RAD) or Refundable Accommodation Contribution (RAC) under the Act
- not have enough funds readily available to make the payment, or making the payment would seriously affect their personal finances
- be entitled to an exit entitlement, either when conditions under the residence contract are fulfilled or in line with section 27 of the Act.
The operator can ask for evidence of the resident’s income and assets, for example a Centrelink income and assets assessment. This must be assessed under the Aged Care Act 2024 (Commonwealth).
Application process
How residents apply for payment
Residents or their authorised representative must apply to the operator within 60 days of whichever happens later:
- being approved to enter an aged care facility, or
- leaving the retirement village.
They can use the Notice of Intention to Vacate form to inform the village operator they plan to leave and want to request aged care payments.
Upon receiving an application for payment
Once the operator receives the completed application, they must:
- Start making payments to the aged care facility within 30 days. These payments cover the resident’s daily accommodation costs.
- Continue making payments until one of the following happens:
- the total paid equals 85% of the operator’s reasonable estimate of the resident’s exit entitlement
- the resident becomes entitled to receive their full exit entitlement.
It is an offence to fail to make payments as required under section 30 of the Act. A maximum penalty of $10,000 applies.
Contact the Retirement Village Unit
Email: retirementvillages@sa.gov.au
