Residential Care Subsidy: Are You Eligible?

The New Zealand Ministry of Health can help you with the costs of long-term residential care – in a hospital or rest home – through the Residential Care Subsidy, paid directly to your chosen hospital or rest home. Before you apply for long-term care, you’ll need to have your care needs assessed and then find out whether or not you’re eligible for government-subsidised care.

Long-term care costs can quickly accumulate, so it’s essential that you have all the information you need regarding subsidised care as soon as possible. In light of this, our Elder Law specialists have put together this practical guide to help you find out whether or not you’re eligible for the Residential Care Subsidy.

Residential Care Subsidy: General Eligibility Criteria

Below is a general eligibility criteria list for a Residential Care Subsidy (Source: Work and Income NZ).

Financial Means Assessment and Asset Thresholds

Work and Income needs to assess the total value of your assets to see if you are within the threshold – this is called the financial means assessment.

If you are 65 years or over, the total value of your assets must be equal to or below the threshold for your unique circumstances. The asset thresholds for a residential care subsidy from 1 July 2018 are as follows:

The asset thresholds increase annually, on 1 July every year, in line with the rate of increase in the Consumer Price Index.

Work and Income will take these assets into account when completing your financial means assessment:

Work and Income will not count:

(Source: Work and Income NZ)

Excess Gifting and Other Considerations

In the five years prior to making an application for a residential care subsidy, only $6,500.00 per annum is considered as safe gifting. Any funds over and above this sum will be considered excess gifting. The Ministry of Social Development can look back as far as they like to determine whether any excess gifting has been undertaken.

In undertaking the application for a residential care subsidy, the Ministry of Social Development will claw back funds it considers has been excess gifting and the funds are treated as being available to pay for care.

If you have a family home and it is owned by a family trust, a declaration will need to be completed detailing the assets sold or gifted. You will need to provide copies of all trust documentation including any gifting completed.

Applying for Residential Care Subsidy?

Our professional lawyers here at Gillespie Young Watson can assist in advising on eligibility for a residential care subsidy and assist in completing the application. If you have a family trust and are undertaking incremental gifting, we have a dedicated gifting team member to ensure that annual gifting to your trust is not overlooked.

Contact us or give us a call at 0800 GYWLAW for further assistance.