Asset and Income testing for public and private hospital care .

This has been a contentious matter for a long time and is especially so now . Not only did the legislation that required all people accessing emergency treatment to pay have to be withdrawn because of public resistance but also when the coalition failed in 1998 , the Bill before the select committee was stalled and not reported back as the majority partner of the coalition was not prepared to progress the Bill because it was that of the minority partner .

They also nominated that the Bill was unfair to some segments of the population - this was discovered by the government after two readings and the select committee process

Index of topics
The proposed bill
Older people in public Hospital
Older people in private Hospital
Older people in Rest Home Care
Existing conditions
People 65 years and older
People 50-65 years
General information about costs etc..
Present Regime

The Social Security ( Residential Care ) Amendment Bill ( 124-1)

This Bill was introduced in May 1998 and had a second reading in the same month May 1998
The Select Committee report was due Nov 1998 but the coalition broke up and the Bill was not progressed and lies with the select committee unactioned as far as the required report to Parliament

We contributed to the written submission put forward by the Federation and attended when oral submissions were taken .

Main points of the Bill

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For older people in public hospital residential care .

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For older people in private hospital residential care .

An older person is required to be income means tested but not asset means tested . The income test is to determine how much is to be contributed to cost of care - income is the same as defined under section 3(1) of the Social Security Act with the following particular features.

Realisable assets do not include the family home or car or bonus bonds or pre-paid funerals or personal effects .

If realisable assets are generating low or no income or steps have been taken to reduce income from such realisable assets then a notional income can be assessed by Income Support .

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For older people in long stay Rest Home Care

Existing conditions for long stay Care

At the time that this Bill was being progressed through Parliament.

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People 65 years and over .

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People 50-65 years

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The maximum amount required to be paid by anyone who is living in rest home or hospital is $636. This amount includes New Zealand Superannuation ( less a weekly personal allowance which they retain ) so that the rest of the cost of their care is provided from their private income .

This amount is set by regulation and while the Bill does state that the patient has to contribute to the full cost of care this is limited by the regulation .

Gifts of up to $5000 per year can be made by the person in hospital residential care but above this figure Income Support may attribute a notional income to the value of the gift in excess of that amount in determining available income .

If individuals need long-stay residential care but do not qualify for the Residential Care Subsidy because of their income and assets , they have to sell assets . Where this involves the sale of the familyhome , individuals have the option of entering into an interest free loan agreement with the Crown and a caveat is placed against the title of the property .

When the person dies , or the home is sold , the loan by the Crown is repaid . Where there are non-core members of the family ( siblings , adult children with disabilities , same sex partner , etc.) living in the family home , the family members have the option of entering into a new loan agreement .

After the decision to not report the Bill back to Parliament so that the legislation could be enacted the government of the time changed the thresholds as follows

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Current conditions for long term care