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Budget Guides
This section is designed to help you during the annual village budget process. Click on one of the sections below...
The one thing that ensures everyone starts pulling out their hair.
In April, each year, the budgetary cycle really gets into full swing. If the Residents Committee or Finance Subcommittee has been reviewing the quarterly accounts throughout the year, then the process is well on its way and should not be too difficult. If not, then you have a lot of work to do in a short timeframe.
The RVRA has developed a tool to assist you. The Budgetary Process Guide will help to ensure that you meet all the legislative requirements and have the appropriate plan and time frames in place. This will aid you in ensuring that all the necessary work entailed in presenting the village budget to the residents, for their approval or rejection, goes as smoothly as it can.
The Guide highlights and separates the legislative requirements and what the RVRA considers Best Practice. The document can be downloaded and/or printed. Good luck!
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T: 1300 787 213 I E: info@rvra.org.au I www.rvra.org.au/education I Budgetary Process I May 2024
BUDGETARY PROCESS
Timeline Originator1 Action Reference
28 October, December, March, June
– within 28 days after the end of
each quarter in the financial year
Operator Operator must provide the RC2 with a copy of the quarterly financial accounts.
After the 28 day period, the Operator must provide a copy to any resident who makes a request. S. 118E
January and February RC/Operator Meet and agree budget process for the period to 30 June, including the scope of the work.
This also includes the CWF expenditure and the AMP costs if appropriate.
Best
Practice
March RC/Operator
Forecasts for income and expenditure agreed, including apportionment of any expenses between HO
and Village expenses, where appropriate. Requests for further information determined and
provided. Operator must provide responses to any reasonable request for additional information.
Best
Practice
March/April RC/Operator
If the annual budget is released to residents before the issue of the March CPI then the December CPI
must be used. If issued after the release of the March CPI, then it must be used as it is the one
“published most recently” before the current budget is provided to residents.
S102A(2)
April RC/Operator 3rd quarter budget finalised. March CPI advised.
Budget and accompanying papers finalised and agreed.
Best
Practice
1 May - i.e. At least 60 days before the
commencement of each financial year Operator
Operator must supply all village residents with proposed annual budget, accompanied by all relevant
explanatory papers. Proposed budget must be accompanied by a notice.
Operator must provide responses to any reasonable request for additional information.
S. 112
Organise the budget meeting
RC to determine own procedures RC3 Send out initial notice of the meeting and agenda, and then a reminder.
Organise the meeting, voting method to be used and proxies – advise residents in notice.
Best
Practice
By 31 May - within 30 days of receiving
proposed annual budget RC3
Residents must meet, consider and vote on the budget if the increase in recurrent charge is above
CPI. Letter sent to Operator advising of acceptance or rejection of budget.
Chair of RC chairs the meeting. If there is no returning officer, one will need to be elected by a show
of hands. Residents will vote on 3 motions: recurrent charges if above CPI, expenditure in proposed
annual budget and auditor consent.
Special Resolution required for any change in services.
Operator may attend but must leave prior to any vote being taken.
S. 114
Best
Practice
Schedule 1
S. 75
31 October – within four months of
the end of the financial year Operator Operator must provide the village residents with copies of audited accounts. If no RC then a copy to
be displayed on common property or provided to a resident who requested a copy. S. 119
1. In this document, use of the word Operator may be interchanged with and/or include the Village Manager, depending on the Village Operators and RC refers to the Residents Committee or Finance
Sub-Committee depending on RC organisation and operations within the Village.
2. Where reference is made in this document to the actions of the RC, if there is no committee any resident may act.
3. These actions do not apply where recurrent charges have been varied by fixed formula or have not been varied or the variation does not exceed the CPI. However, a vote may be required for the Auditor Consent.
BUDGETARY PROCESS
Timeline Originator1 Action Reference
28 October, December, March, June
– within 28 days after the end of
each quarter in the financial year
Operator Operator must provide the RC2 with a copy of the quarterly financial accounts.
After the 28 day period, the Operator must provide a copy to any resident who makes a request. S. 118E
January and February RC/Operator Meet and agree budget process for the period to 30 June, including the scope of the work.
This also includes the CWF expenditure and the AMP costs if appropriate.
Best
Practice
March RC/Operator
Forecasts for income and expenditure agreed, including apportionment of any expenses between HO
and Village expenses, where appropriate. Requests for further information determined and
provided. Operator must provide responses to any reasonable request for additional information.
Best
Practice
March/April RC/Operator
If the annual budget is released to residents before the issue of the March CPI then the December CPI
must be used. If issued after the release of the March CPI, then it must be used as it is the one
“published most recently” before the current budget is provided to residents.
S102A(2)
April RC/Operator 3rd quarter budget finalised. March CPI advised.
Budget and accompanying papers finalised and agreed.
Best
Practice
1 May - i.e. At least 60 days before the
commencement of each financial year Operator
Operator must supply all village residents with proposed annual budget, accompanied by all relevant
explanatory papers. Proposed budget must be accompanied by a notice.
Operator must provide responses to any reasonable request for additional information.
S. 112
Organise the budget meeting
RC to determine own procedures RC3 Send out initial notice of the meeting and agenda, and then a reminder.
Organise the meeting, voting method to be used and proxies – advise residents in notice.
Best
Practice
By 31 May - within 30 days of receiving
proposed annual budget RC3
Residents must meet, consider and vote on the budget if the increase in recurrent charge is above
CPI. Letter sent to Operator advising of acceptance or rejection of budget.
Chair of RC chairs the meeting. If there is no returning officer, one will need to be elected by a show
of hands. Residents will vote on 3 motions: recurrent charges if above CPI, expenditure in proposed
annual budget and auditor consent.
Special Resolution required for any change in services.
Operator may attend but must leave prior to any vote being taken.
S. 114
Best
Practice
Schedule 1
S. 75
31 October – within four months of
the end of the financial year Operator Operator must provide the village residents with copies of audited accounts. If no RC then a copy to
be displayed on common property or provided to a resident who requested a copy. S. 119
1. In this document, use of the word Operator may be interchanged with and/or include the Village Manager, depending on the Village Operators and RC refers to the Residents Committee or Finance
Sub-Committee depending on RC organisation and operations within the Village.
2. Where reference is made in this document to the actions of the RC, if there is no committee any resident may act.
3. These actions do not apply where recurrent charges have been varied by fixed formula or have not been varied or the variation does not exceed the CPI. However, a vote may be required for the Auditor Consent.
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T: 1300 787 213 | E: admin@rvra.org.au | W: https://www.rvra.org.au/
PO Box 3349 Asquith NSW 2077
ABN: 16 674 035 89
Retirement Village Budgets and the Consumer Price Index
The Consumer Price Index (CPI) is a calculation published each month by the Australian Bureau of
Statistics (ABS) to measure household inflation and includes statistics about price changes for
various categories of expenditure. In addition, they are published in various formats to give us
information about different types of spending in different parts of Australia, including the “big
picture” spending across the nation.
When residents enter a retirement village, they sign a contract which specifies how the recurrent
charges they will pay are to be varied. There are two basic methods of variation: either by fixed
formula (for example in line with movements in the aged pension rate or in line with movements
in the Consumer Price Index (CPI)) or by another method. The “other” method is any method that
is not a fixed formula. The most common “other” method is in accord with a village budget
consented (either actual or assumed) to by the residents.
The Act goes on to say that, if an operator proposes a village budget which will result in recurrent
charges being increased at a rate equal to or less than the prescribed CPI variation, then the
“operator does not require the consent of the residents as the increase does not exceed the
increase in the Consumer Price Index (CPI) since those charges were last increased”.
The subset of the overall CPI figures used in calculating the “prescribed CPI variation” is known as
the Consumer Price Index (All Groups) for Sydney”. The variation is calculated as the percentage
increase between the index last issued before the operator provides the residents with a
proposed budget, and the index issued immediately before the date when the last rise in
recurrent charges took effect. Thus, the actual calculation of the CPI percentage increase to be
used will depend on each village’s circumstances, including the financial year upon which a village
operates.
The resulting CPI variation to be used for retirement village purposes because it is a subset of the
overall CPI, can be different to the National CPI figures that the media commonly quotes.
PO Box 3349 Asquith NSW 2077
ABN: 16 674 035 89
Retirement Village Budgets and the Consumer Price Index
The Consumer Price Index (CPI) is a calculation published each month by the Australian Bureau of
Statistics (ABS) to measure household inflation and includes statistics about price changes for
various categories of expenditure. In addition, they are published in various formats to give us
information about different types of spending in different parts of Australia, including the “big
picture” spending across the nation.
When residents enter a retirement village, they sign a contract which specifies how the recurrent
charges they will pay are to be varied. There are two basic methods of variation: either by fixed
formula (for example in line with movements in the aged pension rate or in line with movements
in the Consumer Price Index (CPI)) or by another method. The “other” method is any method that
is not a fixed formula. The most common “other” method is in accord with a village budget
consented (either actual or assumed) to by the residents.
The Act goes on to say that, if an operator proposes a village budget which will result in recurrent
charges being increased at a rate equal to or less than the prescribed CPI variation, then the
“operator does not require the consent of the residents as the increase does not exceed the
increase in the Consumer Price Index (CPI) since those charges were last increased”.
The subset of the overall CPI figures used in calculating the “prescribed CPI variation” is known as
the Consumer Price Index (All Groups) for Sydney”. The variation is calculated as the percentage
increase between the index last issued before the operator provides the residents with a
proposed budget, and the index issued immediately before the date when the last rise in
recurrent charges took effect. Thus, the actual calculation of the CPI percentage increase to be
used will depend on each village’s circumstances, including the financial year upon which a village
operates.
The resulting CPI variation to be used for retirement village purposes because it is a subset of the
overall CPI, can be different to the National CPI figures that the media commonly quotes.
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