Residential care subsidy:
What is it?
Residential care subsidy is a programme to help people aged 50 and over who need long-term residential care in a rest home or hospital to afford for the cost of care. You may be able to get the Residential Care subsidy if you:
- have had an assessment of your individual needs that confirms you need long-term residential care in a rest home or hospital and
- need this care for an indefinite length of time and
- are aged 50-64 years, are single and have no dependent child (for you, there is no asset test) or
- are aged 65 years or over and your assets are within certain limits and
- are receiving contracted care services.
Residential care subsidy is paid directly to your rest home or hospital by the Ministry of Health.
Asset threshold
However, there are some asset thresholds that you will have to meet:
There is an asset threshold which limits the maximum asset an applicant can have in order to get the subsidy. From 1 July 2014, people who
- Do not have a spouse or have a spouse who is also in long-term residential care
- Must have combined total assets valued at $218,423 or less to qualify for Residential Care Subsidy
- Have a spouse who is not in care, can choose a threshold of
- combined total assets of $119.614 not including the value of their house* and car
OR - combined total assets of $218,423 which will include the value of their house and car
- * The house is only exempt from the financial means assessment when it is the principal place of residence of the spouse/partner who is not in care or a dependent child.
- combined total assets of $119.614 not including the value of their house* and car
The threshold is adjusted at 1 July each year.
For the asset, they count include:
- cash or savings
- Bonus Bonds
- investments or shares
- life insurance policies
- loans made to other people (including family trusts)
- boats, caravans and campervans
- investment properties
- your house and car.
Therefore, although your assets are locked under a trust, it is still considered as your assets for the Residential Care Subsidy purpose.
Gifting duty
If you give away assets, they still may be counted as assets in your financial means assessment. The social security system operates on the principle that people should look to their own resources first before seeking assistance from the state. Under the Act, all resources are required to be used to help the client support themselves. This approach did not change with the abolition of gift duty.
However, you can gift up to $6,000 within a 12 month period in each of the five years before you apply. This applies to each application for the Residential Care Subsidy.
Gifts of more than $27,000 per year, per application (for couples application too) made before the five year gifting period, may be added into the assessment.
Ref
http://www.workandincome.govt.nz/individuals/a-z-benefits/residential-care-subsidy.html
http://www.workandincome.govt.nz/individuals/brochures/residential-care-subsidy.html
http://www.workandincome.govt.nz/individuals/brochures/abolishing-gift-duty-and-the-effect-on-benefits-factsheet.html
Disclaimer
Information provided above is of general use only. If you intending to rely on above information consult us or seek professional advice. IBBZ Accounting or any of its employee is not responsible should the information above result in any kind of loss to you directly or indirectly.