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accessing emergency treatment to pay have to be withdrawn because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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- it amends the law relating to older people in long stay
residential care in a public hospital or a private hospital
- it applies to those assessed as requiring care for an
indefinite period , aged 65 or more or aged 50 years or over
but under 65 years unmarried with no dependent children .
For older people in public hospital residential care .
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- They are no longer to be income and asset tested and
are not required to contribute towards the cost of their hospital
- The rate of New Zealand Superannuation is reduced to the
hospital rate of payment , currently $26.98 and the resident who
qualifies for a Community services Card is eligible for annual
clothing allowance , currently $191.08.
- The spouse of an older person in public hospital residential
care who qualifies for a community services card is entitled to
have the payment increased to that which would apply if unmarried ,
including , where applicable , a living alone allowance and a
weekly visiting allowance , currently $27.60.
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
- Only 50% of income from private super or annuities is
counted as income (same as that for rest home test )
- Annual earnings of spouse at home below $28,927 ( 0 or 1
dependant) which is the same as rest home test .
- income from realisable assets above $500 ( single person ) ,
$1000 ( married couple both in care ) , $3000 ( married couple one
in care ) is counted as income .
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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net rent from the family home this being the rent after costs of
essential repairs and maintenance are deducted . If no rent has
been generated after 3 months from the date of entering care then
a notional rent will be assessed by Income Support . Exceptions to
this rent rule apply when spouse or dependant lives in family home
or a relative or other person lives in home having been there
continuously for 5 years previously .
- Residents who qualify for a Residential Care Subsidy after
being income tested will also qualify for the clothing allowance ,
and spouse at home will also qualify for a visiting allowance and
the increase to the single ( and where applicable living alone )
rate of New Zealand Superannuation..
For older people in long stay Rest Home Care
- Income and Asset testing remains - there is no change .
- Residents who qualify for a Residential Care subsidy will also
qualify for the clothing allowance , and the spouse at home will
also qualify for a visiting allowance and the increase to the
single (and where applicable living alone rate ).
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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- Single - the asset threshold is $6500 and this includes
car , home savings and investments . All income received is taken
into account .
- Married - with both in Residential Care the asset threshold
for joint assets is $13,000 and includes as above . Joint income
is taken into account for income test.
- Married couple where one is in residential care the asset
threshold is $40,000 with the family car and home exempt .
Joint income is taken into account but earnings from spouse of
$28,927 is exempt ( will vary according to number of dependants ) .
People 50-65 years
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- Single - the asset and income test is the same as for
single over 65's
- Married people and single with dependants - no income and
asset test . Beneficiaries are required to contribute their benefit
towards the cost of their care , but retain a personal allowance .
Non beneficiaries are not required to contribute at all .
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
- Single person can retain assets of $15,000 previously $6500
- Married with one partner in care assets of $45,000 previously
- Married both in care assets of $30,000 previously $13,000.
The latest regime for long term care .
This new Government policy also will exempt elderly people
from both asset and income testing if their long term care is due
to being victims of violent crime .
Government has rejected the charge that it is using older people
to bail itself out of its fiscal problems , after having given
younger people $1.2 billion in tax cuts in the 1998 year -
" The Government is not setting out to get all its savings from
older people " was a statement by the then Minister of Health.
The fact remains that it is only the elderly that have to pay for
long term care
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