Residential care subsidy
The residential care subsidy provides financial assistance for those who are assessed as needing long-term residential care in a rest home or hospital.
The Ministry of Health is responsible for providing the residential care subsidy. Work and Income is responsible for determining whether you qualify for the subsidy by assessing your income and assets.
Can I get the residential care subsidy?
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 licensed rest home or hospital, and
- You need this care for an indefinite length of time, and
- You are 65 or older (though some people aged 50-64 may also qualify).
And ...
- The value of your assets is within certain limits, and
- Any income you receive goes towards your care – there are maximum contributions applying in each Territonial Local Authority Region. To check your region click here
However, the limits on your income and assets will not be included if you need residential care because you have been the victim of a crime.
Assets
What assets can I own?
Work and Income takes into account the value of your assets to assess whether you may qualify for a residential care subsidy. Your assets must be under these limits:
- $160,000 if you are single or widowed or
- $160,000 in combined assets if you are a couple and both in long-term residential care or
- $65,000 in combined assets if you are a couple and only one of you is in care.
By 'assets', Work and Income mean things like:
- Cash or savings
- Investments, shares or stocks
- Loans made to other people (including family trusts)
- Your house, chattels and car if you live alone.
Assets not included:
- Your house, chattels or car if your partner or dependent child still lives at home
- Personal belongings such as clothing and jewellery
- Pre-paid funeral expenses for you and your partner of up to $10,000 each
If you gift cash or property...
If you or your partner gives away cash or property, these are gifts and are counted as assets in assessing whether you qualify for the residential care subsidy. The maximum amount you can gift in any year is $5,000.
Work and Income generally looks at any gifting you've made in the last 5 years and you may be able to gift retrospectively for up to 5 years if you received a high level of care before you applied.
The gifting limits for the residential care subsidy are different from those used by Inland Revenue for tax purposes.
If you own your home...
Your family home only counts as an asset if:
- you are single or widowed, or
- both you and your partner are in long-term residential care.
It is not counted as an asset if your partner or dependent children live in your home. If your home counts as an asset, you probably won't qualify for a subsidy.
You could get a loan...
If you don't qualify for a residential care subsidy because your home is counted as an asset, you may be able to get an interest-free loan from Work and Income to help pay for your care.
The loan is repaid when you sell your home, or from your estate – and in some cases, you won't have to pay the loan back straight away. If you are interested in this option, please talk with Work and Income – they will give you more information.
Income
How much can I earn?
There are no limits on the income you can earn – but any income you earn will go towards your care upto the maximum contributions applying in each Territonial Local Authority Region. Click here for the limit in your region.
What is meant by 'income'?
Income includes things like:
- New Zealand Superannuation, any pension or income support payment
- Overseas Government pensions
- Contributions from relatives
- Accident insurance payments
- Earnings from investments or business
- Income from a family trust
For New Zealand-registered private superannuation schemes and annuities, only 50% is counted as income. If you get a War Disablement Pension, this is not counted as income.
If you have a partner...
Any income your partner earns (not including New Zealand pensions and income support) is counted in assessing if you qualify for a subsidy. The limits depend on how many dependent children you have.
How much will I get?
The residential care subsidy is paid direct to the rest home or hospital. The amount that is paid depends on how much you contribute to your care.
If you receive New Zealand Superannuation, a Veterans Pension or income support, most of your payments will go towards your care. The rest is then paid to you as a personal allowance of $31.85 a week.
You also receive a clothing allowance of $255.55 a year.
If you have a partner living at home...
If your partner receives New Zealand Superannuation, a Veterans Pension or income support, they will get an increase in their payments, and a special disability allowance of $31.85 a week to help with the costs of visiting you.
If they don't receive any payments from Work and Income, they may qualify for income support after you go into care.
What happens next?
You'll need to get in touch with a needs assessor in your area. If you would like the name of someone you can contact, call the Ministry of Health on 0800 737 777. They'll be happy to help you.
When you have been assessed as needing residential care, you (or a person acting for you) will need to complete an application. Your needs assessor will complete the authorisation thant's attached with your application.
Send your application to Work and Income, along with proof of your income and assets, and any other proof they need to see. Please call them to discuss what you need to send.
If you have any other queries...
Their address is:
Residential care subsidy
Work and Income
Private Bag 9032
Whangarei
If you need a loan...
You can apply for an interest-free loan if your home is counted as an asset and you don't qualify for a subsidy. There's an additional section in your application you need to complete.
If you receive New Zealand Superannuation, Veterans Pension or income support… This will continue until you start receiving the residential care subsidy.
If you have any other queries...
Call Work and Income free on 0800 999 727 or contact your nearest Work and Income service centre.
This information is taken from residential care subsidy – Financial assistance for those in rest homes or hospitals, published by Work and Income in June 2006.