A group representing retirement village residents says it is taking far too long to get a law change that will ensure faster payouts for people who leave.

The government is proposing changes that would see residents and their families paid interest after six months of leaving a unit, and fully repaid no later than 12 months after a unit was vacated.

But Retirement Village Residents' Association national vice president and complaints coordinator Di Sinclair told RNZ’s Morning Report  programme on Tuesday action seemed to have stalled with an amendment bill yet to be introduced to Parliament.

Associate Housing Minister Tama Potaka told Morning Report that Cabinet had made decisions about a substantial package of reforms, which would be announced shortly and progressed next term.

Sinclair said she was hearing many complaints from residents in retirement villages, but the main one was the late return of the capital sum that they paid when they went into a village.

"Depending on the operator or the village they would expect to get that back, minus 25 or 30 percent, which is the fee that is charged which covers all their costs."

She said currently it was taking anything between nine months and two years to get that capital sum back if a resident left or if they had died, then the family had to wait that long.

Residents were supposed to get the money back within six months or so, but it was dragging on and on, she said.

"In the case of a deceased resident the family needs the money back, basically to bury them and to get on and sort things out in the estate."

For a resident who wanted to leave the village because they were moving, then it put them in limbo because they could not get their money back for some time, she said.

In the worst example she had dealt with, it took three and a-half years for the money to be returned.

"You often see residents who don't know their rights, who don't understand what they're entitled to, and they just put up with it for a long time until they can't any longer."

The review of the sector took place over successive governments, the retirement commissioner pushed for the review and it happened, she said.

But she said it had stalled with the coalition government and there was still no legislation in Parliament to address the issue. 

There was a huge power imbalance between the operators and the residents, she believed.

"The old adage is, 'you know you signed the contract, you knew what you were going into', well even the government's people who are investigating this have said that the contracts are unfair, just because you sign a contract it doesn't make it fair.

"It's all about justice and consumer protection and you can't negotiate the contracts, you can't negotiate it."

The association wants people leaving retirement villages to get their money back in three months, but the government was wanting to mandate 12 months, she said.

The village operators are saying they cannot afford it, but no one had ever produced figures to indicate they could not afford it, she said.

"So we're at a bit of an impasse."

Morning Report has requested interviews with the minister and the retirement village operators.