Residential care subsidy
Your eligibility for the government’s Residential Care Subsidy must be assessed by healthcare professionals rather than it being your own choice. As long-term care costs are spiraling it can be assumed that the criteria will get stricter, and care will be likely to be dealt with as much as possible through community care in the first instance. But if you are eligible for long term care support, then the Ministry of Health will pay some of the fees direct to the care provider (through the Residential Care Subsidy) if your assets are below certain thresholds. These means tested thresholds are adjusted each year on 1st July.
Asset threshold A - $273,628 or less of combined assets with your spouse/partner which includes your car and house.
Threshold B - $149,845 or less excluding the family home and vehicle.
If you have a spouse or partner who is not in long term residential care, then you can choose either threshold A or B.
If you are aged 50 to 64 and single with no dependent children, then you will automatically meet the asset test.
These thresholds are clearly very low and out of step with average home values and you can therefore assume that anyone who owns their own home without a mortgage is unlikely to get much support if they choose threshold A.
If you qualify under the asset means tests, then there will also be an income assessment which will determine your eligibility.
There are also rules limiting the value of gifts you can make per year (and this is looked back for several years) to ensure people don’t gift away all their assets so that they can avoid paying for long term care. Gifts of $7,500 per year in the last 5 years are ignored, but gifts more than 5 years ago are ignored up to a total of $27,000 per year (but that is the total for you and your partner).
If you have spare cash/assets and would like to pass some on to family members rather than it potentially being swallowed up in care home fees at a later date, then we encourage you to contact us for advice about starting to make some regular gifts.
Please reach out to us if you would like to review your or a family member’s eligibility for the Residential Care Subsidy. Get in contact or give us a call on Ph: 03 578 3386 – we can help.
