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).
- You are between 50 and 64 years old, single, and have no dependent children. If so, you will not need an asset test.
- You are 65 years of age or older and your assets are within certain limits.
- You have been professionally assessed to need long-term residential care in a hospital or rest home, and need this care indefinitely.
- You pass the financial means assessment.
- You must be eligible for publicly funded healthcare and disability services (i.e. a New Zealand citizen or permanent resident).
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:
- $227,125.00 for a single or widowed person in care (including the value or their home and car);
- $227,125.00 for a couple with both partners in care;
- $124,379.00 for a couple with one partner in care (excluding their home and car). Couples, with one partner in care, can choose to be tested under the $227,125.00 threshold, but the house and car will not be exempt.
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:
- Cash or savings
- Bonus bonds
- Investments or shares
- Life insurance policies
- Loans made to other people (including family trusts)
- Boats, caravans and campervans
- Investment properties
- Your house and car
Work and Income will not count:
- Pre-paid funeral expenses for you and your partner of up to $10,000 each if they are held in a recognised funeral plan
- Personal belongings, e.g. clothing and jewellery
- Household furniture and chattels
(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.