Residential care subsidy


“Thanks for the financial update.   As we get older it gets more difficult to keep up with, let alone, understand what’s going on in the financial world, and we take comfort in the fact that you are able to keep up with the play keep our interests in view.   We do appreciate receiving your updates.”

Trevor Brieseman

Will you qualify for Residential Care Subsidy?

In order for one partner to qualify for the Residential Care Subsidy a couple’s total assets (including your house and car) must be valued at $256,554 (2022) or less. If your assets are over this threshold you do not qualify.

If you do not include the value of your house and car and one of you is not in care, and your combined assets are less than $140,495 (2022), you can qualify for the subsidy.

The asset threshold increases by CPI (inflation) on the 1st July each year.

If you do qualify for residential care subsidy your income is also assessed. Income includes:

    • NZ Superannuation payments and overseas pensions are paid directly towards your care.
    • 50% of private superannuation and 50% of life insurance annuities is paid directly towards your care.
    • earnings from interest, bank accounts, investments, business or employment.
    • income from a family trust, trust or estate

Family Trusts  used to provide protection of your assets and allowed you to qualify for Residential Care Subsidy. The level of protection that they now provide is minimal.  Work and Income have been looking through Trusts and have been offsetting the potential income from any investment assets against your entitlement. You can ask for a review of their Residential Care Subsidy assessments.

Gifting Assets

Transferring your assets into a Family Trust or gifting to family members must be done well in advance of entering a rest home and applying for Residential Care Subsidy. You are only allowed to have given $6,500 per annum (individual) in the previous five years.

Any gifting in excess of the annual amount will be added back to the applicants total assets.

Retirement Villages

In our blog ‘Retirement Villages – Pros and Cons‘ we look at what you need to consider before selecting a retirement village or long term care.

Further Reading:

Refer to the Age Concern web site for answers to commonly asked questions. Residential Care Asset Threshold

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