How Loans and Beneficiary Current Accounts can affect your eligibility
The costs of long-term residential care can be substantial. The New Zealand Government assists with this through the Residential Care Subsidy. This subsidy administered by the Ministry of Social Development (MSD) assists eligible older people to meet these costs and plan for their future.
This article outlines the eligibility criteria, what goes into a financial means assessment process and the lesser-known effects of loans and beneficiary current accounts on your entitlement.
Eligibility for Residential Care Subsidy
To qualify for the Residential Care Subsidy, you must meet the following conditions:
- Age Requirement: You must be 65 years or older or be between 50 and 64 and single with no dependent children.
- Care Needs Assessment: You must be assessed by a Needs Assessment and Service Coordination (NASC) service as requiring long-term residential care.
- Asset Threshold: Your total assets must fall below the prescribed thresholds. These vary depending on your relationship status and whether your home and car are included in the assessment.
Asset Thresholds (as at June 2025)
| Situation | Asset Threshold | Inclusion |
| Single person aged 65 or older | $284,636 or less | All assets included |
| Couple (one partner in care, one not) | $155,873 or less | Excludes house and car |
| Couple (one partner in care, one not) | $284,636 or less | Includes house and car |
These thresholds determine whether you may be eligible for financial assistance toward residential care costs. If your assets exceed the relevant threshold, you will not qualify for the subsidy and will be responsible for paying for your care privately.
MSD has rules around gifting of assets. If you have gifted assets above the allowable threshold, MSD may include the excess in your asset assessment. This could result in ineligibility for the subsidy, requiring you to cover the full cost of residential care yourself. See our article from July 2025 for further information on how gifting can affect your eligibility.
Financial Means Assessment
In determining your eligibility for the subsidy, MSD conducts a financial means assessment.
The total value of your assets must not exceed $284,636 (or the relevant couple threshold). The assessment considers the value of the following assets:
- Your family home
- Your vehicle
- Bank accounts
- Shares and investments
- Investment properties
- KiwiSaver or other retirement savings
However, it also includes:
- Loans you have made to individuals or trusts
- Shareholder current accounts
- Beneficiary current accounts
Loans to Your Trust or Other People
If you have made loans to your trust or to other individuals, these may be counted as part of your assets in a financial means assessment.
If a loan is repayable on demand, or if the repayment date has passed but you haven’t been repaid, MSD will treat the outstanding amount as an asset.
MSD expects that, where possible, you should demand repayment and use those funds to contribute toward your care costs.
You may wish to discuss with one of our staff whether gifting or forgiving these loans over time is appropriate.
Beneficiary Current Accounts
If you have funds recorded in your annual financial accounts for your trust under beneficiary current accounts, these are also treated as assets in MSD’s assessment.
It’s important to confirm with your accountant how these accounts are recorded, as their classification can affect your subsidy eligibility. You may need to consider gifting these amounts over time to reduce their impact.
