New Zealand Positive Ageing Strategy

In 2001 the Government introduced The New Zealand Positive Ageing Strategy with ten goals
covering income, health, housing, transport, safety and security,
culturally appropriate services, rural communities, positive attitudes to ageing,
employment, and opportunities for community participation.

A key element of this strategy is “Ageing in Place” whereby seniors can continue to live at home
and maintain their independence as long as possible drawing on support as and when needed.
It implies access to services and resources which ensure a good quality of life
despite age-related illness or disability.

Only 4% of adults with disabilities live in residential care facilities.
A high proportion of seniors remain in their homes until the end of their lives.

Ageing in Place does not only make social sense
- it also makes economic sense with the Government saving around $15000 pa
for each person cared for at home rather than in residential care.

Current key state benefits for seniors are as follows:-

• New Zealand Superannuation is a universal scheme available to all
  without means testing(unless you seek to include a non-qualifying spouse).
  Current rates as at April 1st 2007 (after standard tax at ‘M’) are $277.06 per week
  for single person living alone and $426.24 for a married couple.

  These amounts are not generous and provide only for the basics.

  80% of couples over 65 and 70% of single people receiving additional
  income from other sources, though the $ value is in general very low.

  There are further needs-based provisions for health, disabilities, essential
  home repairs and maintenance etc.
  Several of these depend not only on need but are also means tested.

• Accommodation Supplement
  Eligibility is subject to income limits of weekly gross income for single
  person $23,017.00 and married couple $33,431.00.
  There are also cash asset limits of $2700 - $8100 for single person and $5400
  -$16200 for married couple.
  Between the above limits there is a reduction of 70% in the $ of excess cash assets over the lower limit.

  Qualifying costs include:-

• Mortgage repayments( where the mortgage was for the purchase of the house
  or for essential repairs and maintenance)
• Cost of essential repairs and maintenance
• Rates
• Body corporate fees
• Building insurance premiums
• Mortgage protection insurance premiums

• Essential repairs and maintenance are those required to maintain the house and property
  to a habitable standard.
  
• They should prevent damage or deterioration and therefore loss of value but not to add value
  and must be supported by receipts.

• It is estimated that the elderly are currently receiving over $40m of Accommodation Supplement
  each year but many are not claiming what they are entitled to.
  It does not cover home improvements or modifications but those with disabilities may be entitled to
  house modification grants and those disabled by accident may be eligible for ACC funding.

• Disability Allowance- to be eligible the person must be assessed by a registered medical practitioner
  or specialist as having a disability that is likely to last for at least 6 months and which has led to
  a reduction in independent functioning to the extent that they need ongoing help with normal living tasks
  or ongoing supervision or treatment from a registered health professional.

• The allowance will cover the additional regular and ongoing costs arising as a direct result of the
  disability and so long as they fall within the defined categories such as ambulance fees, clothing,
  day care, medical alarms, medical fees, transport etc.
  It does not cover one off costs, special equipment or major medical treatment.

• There is no asset test but there is a gross weekly income limit of $24,876.00 ( single person)
  and $36,131.00 ( married couple). there are believed to be many who are eligible but do not claim.

• Major Medical Care- unless you have private major medical cover ,
  treatment is provided through the DHB’s.
  This is fine for anything other than “non-urgent” surgery eg hip replacement, cataract etc
  where the elderly may face a long waiting list, the length of varies throughout the country.
  There is no income or asset testing for state provided major medical care or stays in public hospitals.

• Community Services Card- provides subsidies for visits to your family doctor and prescription charges.
  Available to all NZ Superannuitants subject to an income test of single person $21,479.00 and married couple $32,069.00.
  There is no asset test.
  People aged 65 plus whose doctor is part of a Primary Health Organisation(PHO) receive a subsidy on the doctor’s fee,
  but this fee varies so people will still pay different amounts for consultations.

• Residential Care Subsidy- around 7% of seniors are in residential care in rest homes with about 70% of these
  receiving the subsidy.
  The likelihood of going into care increases with age and it is estimated that over 40% will go into care prior to passing away.
  Of these, it is expected that
  • 50% would die within 3 months of going into care,
  • 30% 3 months to 5 years and 20% over 5 years.
  • Seniors are expected to pay for their residential care to the extent that they are able .

  Residents have to contribute their net income, apart from a small allowance, up to a maximum of the highest
  payment made for subsidised patients in rest homes in the area
  – this can be as high as $750 in some areas - this excludes “extras” beyond the contracted services).

  For a married couple with one in care the house is excluded from the assets and the current threshold is $55,000.00 .

  For both in care and a surviving partner in care they have to contribute from their assets if they exceed $150,000
  (increasing by $10,000 1 July 06 and annually thereafter).

• Rates Rebate- the eligibility rules have been changed effective 1 July 06 such that this
  benefit will apply to the majority of superannuitants.
  The rebate is 2/3 of annual rates in excess of $160 reduced by $1 for every $8 that household income exceeds $20,000
  (plus $500 for each dependant) and subject to a limit of $500.
  Income is measured in the tax year preceding the start of the rates year.

• Other benefits- other benefits that may apply include:-
  • Living alone payment
  • Funeral grant
  • Pharmaceutical subsidy card
  • High use health card
  • War veteran entitlements
  • Home modification grant
  • Special needs grant
  • Special benefit
  • Advance payment of any benefit
  • Student loan
  • Residential care loan
  • Domestic purposes benefit
  • Sickness benefit
  • Invalids benefit

Income tests- income definition- the definition of income for benefit purposes is different
to the income tax definition and is contained in Section 3 of the Social Security Act 1964 and includes:-

• Any money received which is not a one-off capital payment
• The value of any interest acquired which is not a one-off capital payment
• Payments, capital payments or the value of credits or services received
  periodically that are made and used for an income-related purpose
• The value of goods, services, transport or accommodation supplied on a regular basis.
• Asset or income deprivation- there are provisions in respect of gifting to others or selling assets
  for less than market value.
  
• Amounts in excess of $5000 pa per donor over the previous 5 years may be added back to
  the estate for asset testing.
  
• Assets or income applied for your own benefit are not viewed as deprivation
  You will however need to be able to account for these items to show that they have
  not been gifted as part of a deliberate running down of assets.

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