Rest home sinks following pay equity settlement

Dozens of elderly Aucklanders are grappling with the news their Remuera retirement village is closing its doors.

The families of residents living in the Caughey Preston rest home were told last Monday the facility was shutting down, and they would need to find alternative accommodation by October 1.

The daughter of a 93-year-old resident who's been living in the facility for the past five years says finding a new home for her mother has proven difficult.

"I rang around Remuera… and they told us they've been taken by surprise too. All of these people have rung trying to find places for their relatives, so we're all on waiting lists really," she told Newshub.

The Auckland woman, who didn't want to be named, says there are a number of elderly patients living in the facility who suffer from conditions like dementia.

Her mother is lucky in that she has family nearby. Others aren't so fortunate.

"Everybody's sort of wondering what to do, and I would say some of them are quite upset," she said.

"I mean, it's your home after all. It's like us being chucked out of our home - we wouldn't like that, would we?"

A letter sent to residents' families says the Caughey Preston Trust carries an operational loss which is "worsening on an annual basis".  

An aging building stock and insufficient Government funding are cited as contributing factors for the closure, along with an "increasing Government control over the business model".

A spokeswoman for the facility wouldn't confirm how many residents are currently residing in the facility, but its website says it has capacity for between 100 and 200 people.

She said the facility is focused on supporting both clients and staff through the transition.

The New Zealand Aged Care Associations says the closure isn't a surprising occurrence - and it's not a one-off, either.

Chief executive Simon Wallace says the squeeze on independent, not-for-profit retirement homes can largely be put down to the recent pay equity settlement announced by the Government.

"Unfortunately the Government funding is not fully covering the cost of the increase in caregiver wages."

Mr Wallace says to his knowledge, around 100 other rest homes are affected. Many of them are small, independent or rural facilities.

While there are a number of rest homes near Caughey Preston, this isn't the case in more isolated areas, where displaced residents might struggle to find alternative accommodation.

Mr Wallace says while the wage increase has exacerbated the issue, that's not what needs to change.

"We absolutely support the uplift in caregiver wages," he said.

"There needs to be a relief package or some sort of transitional funding put in place, to help these rest homes stay in business while they look at restructuring their business going forward."

Without the help of Government funding, Mr Wallace says we'll likely see similar occurrences around the country in months to come.