What is a Residential Care Subsidy?
When a change in living arrangements is required due to health needs of elderly, the process usually starts with an assessment by a needs assessor under the relevant DHB (Ministry of Health). An assessment is completed on whether a person needs care at a rest home level, specialist dementia unit, long-term care hospital or psycho-geriatric unit.
If the assessment shows the need for long-term residential care, then the next step is a financial means assessment (asset and income testing) as to whether a person qualifies for either a residential care subsidy or residential care loan.
After receiving all financial information, the Residential Care Unit/WINZ then decide as to whether to grant a subsidy (or residential care loan against property) or, if the applicant is responsible for paying for their own care until their assets reach the applicable threshold.
There are two asset thresholds to determine whether an individual is eligible to receive the Subsidy. These are asset threshold A and asset threshold B.
Asset threshold A:
For a single person, or a couple where both are in long-term residential care, asset threshold A applies.
As at July 2018, asset threshold A is $227,125. The assets counted in asset threshold A include the house and car; cash, savings; investments; shares; loans to other people (including family trusts); boats; caravans; campervans; and investment properties.
Asset threshold B:
For a couple aged 65 years and over where only one is in long-term residential care either:
- The house and car is exempt and asset threshold B applies; or
- The couple can opt for the total asset level in threshold A.
As at July 2018, asset threshold B is $124,379. The assets counted in asset threshold B include cash; savings; investments; shares; loans to other people (including family trusts); boats; caravans; campervans; and investment properties.
How can Davenports Harbour Lawyers help?
We recommend contacting one of our residential care specialists (Kristin Sumpter and Michelle Prowse) if you are concerned about residential care subsidies, or have any queries regarding the process.