Rest Homes - Your Options

Asset Rich, Income Poor - how to use the equity in your homes to provide an income in retirement


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Asset Testing - Rest Homes

The Social Security (Long-term Residential Care) Amendment Act 2004 came into effect on 1 July 2005.

Since 1 July 2005, older people can retain more of their assets while still qualifying for a Government subsidy to help meet the costs in a rest home or continuing care hospital.

Single people and couples, both of whom are in care, will be able to keep $150,000 of assets (including property and savings) before they must start to contribute to the cost of their care.

From 1 July 2005, the applicable asset thresholds in the Act increased:

  • from $15,000 to $150,000 for a single or widowed person in care;
  • from $30,000 to $150,000 for couples with both partners in care;
  • from $45,000 to $55,000 for couples with one partner in care (house and care remains exempt)


  • couples with one partner in care can opt to be tested against the $150,000 threshold for their total assets

The level in each category will increase by $10,000 a year from 2006 until all asset testing is removed.

Does the income test still apply?

Yes.  The Government considers that it is reasonable to expect older people to contribute towards expenses they would have to pay for in their own home.

Changes to income testing:

  • income from any assets are included in the income test, except for the first $780 per person per year.
  • for couples with one partner in care, any income from paid employment of the partner living in the community is excluded.

Refer also to:
Family Trusts
Gift Duty

For a more comprehensive questions and answers on asset testing, eligibility for rest home care please refer to:
Ministry of Health web site