Residential Care

The Residential Care Subsidy

Revised 26th June 2000

We receive over our Greypower phone line many different types of questions from our members. While we try to answer them to the best of our ability, we do , in some cases , refer our members to people who can answer with more accuracy , mainly because there are sometimes changes to the regulations of which we are not aware .
Fortunately the majority of the queries are concerning membership itself and that we can handle , but , there are some queries that occur regularly so we believe that it may be of assistance if we reiterated here the details of the Residential Care Regime and subsidy arrangements , which to best of our knowledge are correct ..

An index of topics

The current regime in general

The process involved

How to apply for a subsidy

Asset and income test

Pre-paid funerals

Gifting of assets

Once the threshold of allowable assets is reached

Hospital rate
Payment to qualifying partner
Payment to non qualifying partner

Allowances and grants available

Clothing allowance
Special needs grant
Special disability allowance

The current regime

A most frequently asked question is about Rest Home care. This sadly is generally by family members who have a parent qualifying for rest home care but who had been unaware of the asset and income tests involved - the reaction is generally of shock and remonstrances , sometimes abusively , about our uselessness in allowing this situation to prevail.

We explain that the regime is entrenched in law and while it is discrimination against the elderly , as it only applies to single persons over 50 and married couples over 65 any court case would fail as unless there is an inadequacy in the way the law has been applied , judges are there to uphold the law not make judgements against the law .

The process

Currently Rest Home Care requires an assessment by social workers and geriatricians to determine if Rest Home or Hospital care is required . Then an asset and income assessment is made to determine if the patient qualifies for the Residential Care Subsidy .
Of course , people once could enter a Rest Home by choice , if they wish , or in some cases if the family wishes , but , currently , unless they have been assessed as requiring this care prior to entering the Rest Home when the private funds are exhausted they will not qualify for the Residential Care Subsidy. The resident then become purely the responsibility of the proprietor or family so that entry to a rest hame is basically by assessment.
A Residential Care Subsidy is available for those no longer able to stay independent and in their own home - but it is subject to an income and asset test .

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How to apply

The process to apply for a Residential Care Subsidy is as follows. We would stress that a subsidy cannot be paid until the " Needs Assessment " has been completed and this wherever possible should be completed prior to admittance to a Rest Home /Hospital . Contact the Older Persons Assessment Unit at Princess Margaret Hospital to make an appointment for a " Needs Assessment " after which an application for a Residential Care Subsidy and an " Authority to Income and Asset Test " form . The application form for the income and asset test. goes to Income Support Service who after the check will advise both the applicant and the Regional Health of the outcome.
If the Residential Care Subsidy is approved the Regional Health office is responsible for payment of subsidy .

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Income and asset test

The income and asset test includes all assets and may also include any gifts of property or cash that have been made in the 5 years preceding the application .This period of time is an accepted period but the Work and Income can go back as long as they consider necessary if they consider some of the actions taken have been avoidance measures.
This effectively means that any gifting to individuals or to a Trust has to be completed at least five years prior to admittance to care.
Any income other than the interest earned off the allowable cash assets is assessed as a contribution towards the Residential Care fees .

For a single person the assets will be used to pay for care until the level is $150,00 after which the care is provided by the Residential Care Subsidy except that an income test is then applied.

For a married couple where one spouse is in Residential Care the assets , except the house and car , will be used to pay for care until the level is $55,000 , after which the care is provided by the Residential Care Subsidy .

For a married couple where both spouses are in Residential Care the assets including house and car will be used to pay for care until the level is $150,000 after which care is provided by the Residential Care Subsidy .

The amount that a fee paying patient will pay for long term care was once limited to $636 per weekbut now it si the subsidy paid to the rest home in the area .
In the case of long term hospital care the amount to be paid could well be below the actual cost of care .

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Pre-paid funerals

Pre-paid funerals are excluded from the cash asset limits with the acceptable amount for funeral expenses being $10,000.

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Gifting of assets .

Currently up to $5000 of assets each year may be gifted by people entering Residential Care without it being regarded as deprivation of assets. This is a total per year not an amount to each recipient . Also up to a maximum of $25,000 can be retrospectively gifted at a rate of $5000 per year ( less any gifting that has already taken place ) to recognise a high level of care received prior to entering Residential Care if they meet the following requirements .

received a high level of care in the form of necessary assistance around the home like personal care such as bathing , toileting , domestic chores ; and
received this care on a continuous or on-going basis ; and
Have not received any Regional Health purchased home-based disability support services for a period longer than 26 weeks while living in their home ; and
been able to remain in their home because crucial care was provided which delayed the need to access Regional Health purchased Residential care ; and
been provided with a high level of care for at least one year ; and
had the care provided to them by someone who lived with them ( not a spouse or dependent child ) .

An additional questionnaire needs to be completed by people who wish their eligibility determined plus confirmation from a medical practitioner that all the criteria have been met .

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Once asset level reached .

Once the assets have been decreased to the required level the Residential Care Subsidy is approved and paid by the Regional Health office. At this time the payment of the New Zealand Superannuation is split
But there is still an income tsest

hospital rate

a part called the Hospital Rate , which is currently $37.47 gross , $31.85 nett , is paid , usually direct to resident's personal bank account or under some other approved arrangement , for personal needs : the balance is paid to the Rest home or hospitals bank account towards the cost of care . The remainder of the cost of the care is paid by the Residential Care subsidy . Payment to remaining partner .
Once the Residential Subsidy is approved a married partner not in the Rest Home becomes entitled to receive an increased payment
payment to qualifying partner
if the remaining married partner is receiving New Zealand Superannuation then the partner becomes eligible for the single rate of New Zealand Superannuation - note that until the assets are reduced to the stated levels it is assumed that there is no need for the remaining partner to receive other than the married rate .
payment to non qualifying partner
if the married partner is a non-qualifying spouse then that partner receives the equivalent of the invalids benefit rate currently $347.81 gross , $285.57 nett

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Clothing Allowance .

A clothing allowance in the form of an annual lump sum is available to residents in receipt of Residential Care Subsidy . This Clothing Allowance , currently $189.51, is paid each April to the resident's ( or their agent's) personal bank account .

Special Needs Grants .

For important items such as glasses , dentures or hearing aids a Special Needs Grant application can be made at any New Zealand Superannuation Centre or Income Support service office who will take into account the financial circumstances of the resident .

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Special Disability Allowance.

When the cash assets reduce to the level of entitlement to the Residential Care subsidy the remaining partner becomes eligible for the special disability allowance , currently $26.76 per week nett .
This is essentially a Hospital Visiting Allowance to enable the remaining partner to travel to visit the resident and meet any extra costs caused by the resident's admission to the Home . This special disability allowance is over and above any disability allowance the remaining partner may be receiving.

The above is a general guide and is believed to be accurate - please contact your local Super Centre if you want more information or assistance in the completion of forms.