Residential Care Subsidy - Rest Homes
Is there any subsidy available to assist with the cost of fulltime rest home care?
THE ANSWER:
Yes, if you have been assessed as needing long-term residential care in a hospital or rest home, you may be eligible for a residential rest home subsidy, from the Ministry of Health. However, there are a number of factors that are taken into account in determining if you are eligible.
IN BRIEF:
If you are within the eligible age and asset and income threshold, you can apply to the Ministry of Health for the Residential Care Subsidy. This subsidy helps with the cost of care. It's paid directly to the hospital or rest home by the Ministry of Health.
WHAT ARE THE ELEGIBILITY & THRESHOLD CRITERIA?
1. AGE
You must be aged either:
65 or older; OR
50-64 and single with no dependent children.
2. ASSESSMENT
You have to be clinically assessed as needing long-term residential care in a hospital or rest home; and
You must need this care for an indefinite length of time; and
You must be receiving contracted care services.
3. MEANS TESTING
Consideration is given to:
Any money or assets you and your partner (if you have one) have.
How much you and your partner (if you have one) earn.
ASSET ASSESSMENT & LIMITS
From 1 July 2024, asset thresholds for Residential Care Subsidy are as follows:
If you're 50-64 and single with no dependent children, you'll automatically meet the asset test.
If you are 65 or older, and single or widowed, your total assets must be $284,363.00 or less.
For couples; If both you and your partner are in care, your total assets must be less than $284,636.00.
For couples with one partner in care you can choose;
Asset limit of $155,873.00 or less, house and car are exempt and not included; or
You can choose to be tested under the $284,636.00 threshold, but the house and car will be included in total assets.
Assets include such things as:
Cash or savings.
Investments or shares.
Life insurance policies with a surrender or cash asset value.
Loans made to other people (including family trusts).
Boats, caravans and campervans
Investment properties.
Assets that aren't included are:
Pre-paid funeral expenses for you and your partner of up to $10,000 each, if they're held in a recognised funeral plan.
Personal belongings such as clothing and jewellery.
Household furniture and effects.
Assets over the limit
If you're 65 or over and your assets are above the threshold because you own your own home, and therefore are not eligible for the subsidy, but your cash is not enough to cover your ongoing care, you may be able to get an interest free Residential Care Loan*. This will help with the cost of your care.
Assets you've sold
Assets you have sold will not be included as you no longer own them. The Ministry may check that the asset was sold for fair value.
Assets you’ve gifted
If you or your partner have gifted assets, there's a certain portion that won't be included as an asset*.
That amount depends on when you made the gifts and the amounts you have gifted.
The rules relating to gifting for someone who applies for Residential Care Subsidy are quite different to those used by Inland Revenue.
If you are below the required asset limits, the next thing you need to do is complete an income assessment. This is the last part of the financial means assessment.
INCOME ASSESSMENT & LIMITS
There are limits on the income you can receive. How the Ministry of Social Development work this out is different for each type of income.
Income includes:
New Zealand Superannuation, Veteran's Pension or any other benefit.
50% of private superannuation payments.
50% of life insurance annuities.
Overseas Government pensions.
Contributions from relatives.
Earnings from interest and bank accounts.
Investments, business or employment.
Income or payments from a trust or estate.
The MSD may also require more information if you or your partner have ever:
Transferred assets to a trust
Been the settlor, trustee or beneficiary of an estate or trust.
THE PROCESS
1. Book a needs assessment
Book an appointment with a Needs Assessment Service Coordination (NASC) agency funded by the District Health Board (DHB). You can contact one by either:
Visiting the Ministry of Health website; or
Calling the Health Seniorline on 0800 725 463.
They will:
Check you meet the Ministry of Health's criteria.
Determine what level of care you need.
Complete a Needs Assessment Certificate.
2. Complete the application for the Subsidy
Once you have been assessed as needing long-term residential care in a hospital or rest home you will need to complete the Application form including the means assessment.
3. Application Approved
The Ministry of Health will advise you if your application for the subsidy has been approved. The Ministry of Health will then make the necessary arrangements with the care facility for payments.
4. Application Declined
If your application for the subsidy has been declined but you have been assessed as needing long-term hospital or rest home care you will need to pay for the care yourself from your own funds, until such time as your asset limits is within the threshold, at which time you can reapply.
*See our upcoming Blog regarding “Gifting in respect of Residential Care Subsidy” for more information on gifting
*See our upcoming Blog regarding “Residential Care Loans in respect of Residential Care Subsidy” for more information on Residential Care Loans.
PLEASE NOTE
The purpose of this is to give an overview of the subsidy available for people in Residential Care and the eligibility criteria for the same.
The information contained here is not an exhaustive list of what is ‘allowed’ and what is ‘not allowed’.
Taking the thresholds into consideration, planning ahead, such as annual gifting etc, can help significantly in the event that you need to apply for a subsidy in the future and thereby helping you meet the asset/income threshold.
It is important to contact us when you think you/a loved one may need care so that planning can commence as early as possible.
Please contact me mjr@younghunter.co.nz or one of my colleagues in the Commercial Team at Young Hunter, https://www.younghunter.co.nz/ who will be able to explain in detail and walk you through the process.
We can also assistance you in planning ahead and protecting assets, in the event that in the future you do need long term care.
References:
https://www.workandincome.govt.nz/products/a-z-benefits/residential-care-subsidy.html
https://www.seniorline.org.nz/rest-homes-hospitals/cost-of-care/income-and-asset-testing/
