NEIGHBOURHOOD SUPPORT NEW ZEALAND
Asset testing for the residential care subsidy
Should an older person need to go into permanent residential care, they do not qualify for state support unless their personal assets are no greater than the following amounts:
- $160,000 for a single or widowed person in care; and
- $160,000 for couples with both partners in care; and
- $65,000 for couples with one partner in care, plus they are able to retain a house and car OR a total asset level of $160,000.
These were the amounts at 1 July 2006 and they are increased by $10,000 each year ($180,000 and $85,000 from 1 July 2008). Income and asset testing for people in aged residential care is being progressively phased out but no date has yet been announced for its entire removal.
There is no asset testing of single people aged 50-64 years requiring care and with no dependent children.
Residential care services are managed by District Health Boards who complete a needs assessment before admitting an older person in to residential care for an indefinite period. Financial means are assessed by Work and Income New Zealand.
A person or couple that has more than the allowable personal assets must contribute towards the cost of their residential care until their assets are reduced to the allowable amount. The maximum contribution that a resident assessed as requiring long-term residential care is required to pay for contracted care services provided to them depends on the region in which their rest home or continuing care hospital is located and the amount is inflation adjusted.
For a single or widowed person or for a couple with both partners in care, the family home may have to be sold before the welfare subsidy is granted.
Those people that plan sufficiently in advance can avoid the effect of this means test. For example, if their personal assets are transferred to a family trust for a sufficient period before moving into residential care, the older person will qualify for the subsidy.
Family trusts can also be a useful device for avoiding the potential conflict and expense that arises when the terms of a will are disputed. If all of the deceased's property has been transferred to a family trust before they pass away, there is nothing left for the family to fight over!
2006 changes
A number of significant changes came in to effect on 1 July 2006.
Superannuitants with a spouse or partner in long-term residential care are now eligible to be paid the single, living alone rate of New Zealand Super. This is an increase of $59 a week for a superannuitant living alone or $39.36 per week for a superannuitant sharing with another person.
The maximum annual rates rebate was increased from $200 to $500 and the income threshold for a rebate was raised from $7,400 to $20,000 per year. As an example, a couple living on NZ Superannuation ($25,276 a year) are now eligible for a rebate of $234 if the rates bill for their home is $1500. See Rates Rebate Scheme
The ‘sharing expenses rule’ has been removed from the Living Alone payment. Single superannuitants may now be able to get the Living Alone payment if their families are helping to pay for some household expenses, such as rates.
Home-based support services and age-related residential care have received a significant funding boost to improve home-based support services and help more older New Zealanders remain in their homes for as long as they wish.
More information is available on asset testing and the 2006 changes on the Ministry of Health internet site.
