Financial help for your rest home and hospital care
Moving from your home into long-term rest home or hospital care is a big change. If you need long-term residential care, you may be eligible for a Residential Care Subsidy that provides financial help towards your costs.
Two Government agencies are involved:
The Ministry of Social Development, through Work and Income (WINZ), assesses your assets and income by what it calls a ‘Financial Means Assessment’.
The Ministry of Health assesses all other aspects of your eligibility, including your need for residential care through its district health board Needs Assessors. The Ministry also pays the subsidy directly to your rest home or hospital.
- You may qualify for the Residential Care Subsidy if:
- You have been assessed as needing rest home or hospital care for an indefinite length of time by a district health board Needs Assessor; and
- You are receiving contracted care; and
- You are over the age of 65 with assets under a certain threshold; or
- You are aged 50-64, single and have no dependent child. In this case, no asset test is required.
What is the ‘Financial Means Assessment’?
This two-part assessment comprises: an asset test to determine whether you are within the threshold for your circumstances, then an income assessment to determine the amount that you need to contribute towards the cost of your care.
If your assets are above the threshold, then you won’t qualify for the subsidy and you will have to pay for your own care. The amount you’ll pay will depend on the maximum amount for your region, as set down by the Ministry of Health.
In this case, you may be eligible for a Residential Care Loan.
The asset test
As of July 1, 2009, if you are single or your partner is also in long-term residential care, your assets must be valued at no more than $190,000 to qualify.
If your partner is not in care, and is living in your ‘principal place of residence’ e.g. your home, or you have a dependant child living in your home, your individual threshold reduces to $95,000 and your house and car are exempt from the asset test.
In this situation, you can still choose a threshold of $190,000 to include the value of the house and car that you both own. On July 1 each year, both thresholds automatically increase by $10,000.
Assets included as part of the asset test may include – but are not limited to – cash or savings, investments or shares, loans made to other people including trusts, boats, caravans and campervans, and investment properties. Your house is only exempt if you are in the situation as explained above.
Therefore your family home and personal vehicle are included if you are single or you and your partner are both in long-term care, or if your partner is not in care and you have chosen the $190,000 threshold as explained above.
Pre-paid funeral expenses for you and your partner up to $10,000 each are excluded, as well as personal belongings such as clothing, jewellery and household furniture and effects. What WINZ calls ‘genuine outstanding debts’ are also deducted from the value of your assets.
If you or your partner give away assets, these may be classed as gifts and counted as ‘assets’.
Gifts up to $5000 a year made in the five years prior to your subsidy application may be excluded. The gifting limit of $5000 per year applies to each of you, if both of you
are applying for the subsidy. It’s important to note that these gifting limits are different to those used by the Department of Inland Revenue for tax purposes.
Gifts ‘in recognition of care’ of up to $5000 may be excluded if made during the 12 months before the date of the asset test and if they also meet other criteria. There is a limit on such gifts of $25,000 over a five-year period.
Your income test
Any income earned by you and your partner will be assessed to determine the amount you will have to contribute to your care. Your income contribution is calculated using your annual income at the date you apply for your financial means assessment.
‘Income’ means your superannuation, pension or any benefit, 50% of private superannuation payments, 50% of life insurance annuities, overseas Government pensions, contributions from relatives, earnings from savings, investments as well as business and employment income from a family trust, trust or estate.
‘Income’ excluded is employment income earned by your partner and income from assets under:
- $1707 a year for a couple where both require care
- $2560 a year for a couple where one partner only requires care
- A war disablement pension from New Zealand or any other Commonwealth country.
Subsidies and payments
Dollar-wise, the subsidy is the difference between the cost of your care and your assessed income contribution. Your rest home or hospital manager can tell you what is included in your cost of care.
You must pay your care costs yourself until the eligibility process has been completed.
If you receive New Zealand Superannuation, the Veteran’s Pension or any other benefit, most of this will go towards your care. In addition to an annual clothing allowance of $246.91 a year (as part of the Residential Care Subsidy), you are allowed to keep a personal allowance of $34.87 a week.
If you have a partner at home, your partner may get the Special Disability Allowance of $34.87 a week to help with costs. Your partner at home may also qualify for a Living Alone Payment.
If your partner receives a benefit or pension, their payment will be increased to the single rate rather than ‘a half married’ rate.
If your partner isn’t receiving any WINZ payments and they have little or no income, they should contact WINZ to check any entitlements.
What happens next?
Contact your local district health board or Needs Assessment Service Co-ordination Agency
See the Home Support section for a list of NASC agencies to arrange a needs assessment. If rest home or hospital care is required, your assessor will complete a Needs Assessment Certificate. If you need help with costs, your assessor will issue you with a Residential Care Subsidy application form and help you fill it out. It’s important to note that these forms are not freely available as is often assumed. They are issued only by your Needs Assessor once your medical eligibility has been confirmed.
Your application form includes a checklist of the paperwork you need to supply with it. If you are over the age of 65, your application needs to be received by The Residential Subsidy Unit no more than 90 days before the date you need your subsidy to start from.
If you’re still not sure if you qualify, phone The Residential Subsidy Unit on 0800 999 727.
Ministry of Social Development (Seniors) www.seniors.msd.govt.nz