If you or a loved one are about to make the move into a rest home, you may be eligible for the residential care subsidy. This is a benefit provided by the government to assist with the costs for those who can not afford those expensive rest home fees.
It is important to note that the residential care subsidy is not a set amount and can differ from person to person depending on their given circumstances. So, if you are eligible, the government may subsidise some or all of the cost of residential care.
To qualify for the Residential Care Subsidy you need to:
- Be a NZ citizen or resident;
- Be 65 years or older (please note that in some instances people aged 50-64 may also qualify); and
- Undertake a care needs assessment that determines you require rest home or hospital care.
If you meet the above criteria, you will need to complete and submit the Residential Care Subsidy application form to the Ministry of Social Development. The application is a detailed and lengthy process which is something that Collins and May Law can assist you with. The application includes a series of questions to assess you financially both in respect of assets and income.
The subsidy can only be back dated 90 days from when you apply so you should apply as soon as you go into care.
The Asset Test has two thresholds that you can choose to be assessed under depending on your circumstances. If you are 50-64, single and do not have any dependent children, you will automatically meet the asset test.
If you are 65 or older, you (and your partners) total assets must be $256,554.00 or less.
If you are 65 or older and your partner does not require long-term residential care, you can choose whether the total value of your combined assets is either:
$140,495 or less if you do not want to include the value of your house and car. The house does not need to be counted as an asset if it is the moan place where your partner lives.
$256,554.00 or less if you do want to include the value of your house and car.
Assets may include:
- Boats, caravans and campervans;
- Shares and investments (including investment properties);
- Cash and savings in your bank account;
- An asset may also be any gifts transferred to someone else during ypur lifetime over the $27,000.00 gifting threshold.
It is important to note that if your house is owned by a family trust, the house is not considered as your own asset and as such will not be assessed as an asset for the asset test.
The Income Test is a means assessment as the underlying principle of the subsidy is that if you can afford to pay for your own care, you should. If you qualify, all of your income should be directed to the rest home and the government will pay the shortfall. However, you can keep the following income per year depending on your situation:
- If you are single, $1,114.00.
- If you have a partner who has also been assessed as needing care $2,228.00; or
- If you are a couple and only one person needs care $3,341.00.
If you own a house and wish to keep it while going in to care, you may qualify for a Residential Care Loan. The loan is essentially provided by the government for the cost of your care and the loan is secured by placing a caveat over the title of your property. The loan is interest free and will be repaid when you pass away or when the home is sold, which ever occurs first.
To be eligible for the residential home loan:
- Still own the home you lived in before going into residential care;
- Your home is worth more than $256,554.00; and
- The total of any other assets you own is less that $15,000.00 if you are single or $30,000.00 if you are a couple.
All in all, the residential care subsidy and loan application is a lengthy process which requires a lot of supporting information such as bank statements, proof of other assets etc. Get in contact with Collins and May Law today and we would be more than happy to assist.
