Some Commonly Asked Questions

Does every older person have an income and asset test when they enter long term residential care?
No. People are only income and asset tested if they wish to apply for a Residential Care Subsidy to help pay for their care.

Are family members of the older person income and asset tested?
No. Adult children and other family members, other than the spouse of the person in care, are not income and asset tested.

What are the asset limits for the income and asset test?
The asset limits are:

What assets may be taken into account?
All assets that can readily be converted into cash may be taken into account.

This can include:
Money on hand or in the bank investments and shares loans made to other people
holiday homes, caravans and boats worth over $2,000.

What are the income limits for the income and asset test?

Any income that is received by both the person in care and their spouse is counted on a dollar for dollar basis as a contribution towards the cost of the person's care.

Some income is exempt:

Some earnings are also exempt. When the spouse of the person in care is living in the community their earnings are exempt up to the following levels;

Can an older person gift money to others?

Yes. Up to $5,000 can be gifted each year by people entering long term residential care without it being considered as deprivation of assets.

Under certain circumstances people may gift up to $5,000 each year retrospectively up to a maximum of $25,000 (less any previous gifting that has already taken place). This allows the older person to recognise significant care that was given to them before they entered a rest home or hospital. Special criteria apply.

Do people have to sell their homes?
No-one is forced to sell their home when they enter a rest home or hospital for long-term residential care.

If a spouse or dependent child is living in the home, then the home is not counted as an asset for the purposes of the income and asset test.

In the situation of a couple where one person needs residential care and the other remains in the community their home, contents, car and other possessions plus $40,000 in cash assets can be retained and they will still qualify for a Residential Care Subsidy.

If a person is single or widowed their home is regarded as an asset. They have the option of selling the property or renting it to provide some income. Should they choose to sell the property then the money from the sale is regarded as an asset. If the property is to be rented some of the rental will be classified as income and used to contribute to the cost of care.

A person who does not wish to sell their home may still be eligible for the residential care subsidy. In this situation the subsidy is considered as a loan which is secured against the house. A caveat is placed on the property and this remains in place until the loan is repaid.

What happens to the house when the older person dies and a person living in it regards it as their home?

This situation can arise where there is a sibling or adult child living in the home that was formerly shared by them and the older person. It is possible for the repayment of any loan against the property to be deferred in the form of an interest free loan until such time as the house is sold. In this way the home is secured for that person for as long as they wish to stay there. Special conditions apply to this policy.

Where can people get more information about the income and asset test?

The New Zealand Income Support Services is responsible for administering the income and asset test function on behalf of RHAS. People needing more information should contact their nearest office of NZISS.

People needing more information about long-term residential care should contact their Regional Health Authority or Crown Health Enterprise.

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