A client applies for Residential Care Subsidy in 1999.
They have gifted $3,000 in 1995 and $30,000 in 1998.
Gifting of $3,000 in 1995 would be allowed.
Gifting of $5,000 would be allowed in 1998 and 1999.
| Total gifting in 5 year period, |
$33,000 |
| less exemption ($3000 for 1st year $5000 per year for 2nd and third year) |
$13,000 |
| Assets to be included in assessment |
$20,000 |
Residential Care Subsidy
: Example - extraordinary gifting
The following examples give two clear extremes of gifting programmes
- one extraordinary and one that is considered ordinary or normal.
They also illustrate that factors, other than only the dollar value of the gifting,
have been considered in order to see the whole picture.
Note that the examples are not definitive, but rather an attempt to show
how to apply policy to a practical
situation.
Example 1 - Extraordinary Gifting
Client owns business assets of $1,000,000 in 1992.
Client sells business assets to trust on 01 November 1992 for $1,000,000,
executes an Acknowledgement of Debt and commences an accelerated gifting plan.
Gifts made (forgiveness of debt)
| 01/11/1992 |
$250,000 |
| 01/11/1993 |
$250,000 |
| 01/11/1994 |
$250,000 |
01/11/1995 |
$250,000 |
Total gifting |
$1,000,000 |
The client applies for residential care subsidy on 01 December 2000.
No gifts have been made in the 5 years
prior to application.
Taking into account all the factors, particularly the amount involved,
the accelerated gifting and the nature of the original assets,
Work and Income could consider the gifting extraordinary and
investigate beyond the 5
year period.
Example 2 - Non-Extraordinary Gifting
Client owns a family home in 1992 valued at $180,000.
Client sells home to trust on 01 November 1992 for $180,000,
executes an Acknowledgement of Debt and commences a gifting plan.
Gifts made (forgiveness of debt)
| 01/11/1992 |
$27,000 |
| 01/11/1993 |
$27,000 |
| 01/11/1994 |
$27,000 |
Total gifting |
$81,000 |
Residential Care Subsidy : Example - extraordinary gifting
| 01/11/1995 |
$27,000 |
| 01/11/1996 |
$27,000 |
| 01/11/1997 |
$27,000 |
| 01/11/1998 |
$18,000 |
| Total gifting |
$180,000 |
The client applies for residential care subsidy on 01 December 2000.
Total of gifts made in the 5 years immediately preceding application is $72,000.
The gifting programme of the family home above would not be considered as extraordinary.
There is no need to investigate beyond the 5 year period,
and only the $72,000 would be taken into account for the financial
means assessment.
Residential Care Subsidy : Recognition of care
If a client has not gifted the maximum allowable at the time of application
for Residential Care Subsidy, they can make a further gift in recognition
of high level care if they have:
As long as the client has received at least one year of high level care,
then they can retrospectively gift up to a maximum of $5,000 for each year
of high level care received, up to a total maximum of $25,000 (minus any
gifting that has already taken place).
Note if the older person has received any Home Support (such as household
management, domestic assistance or personal assistance), or Meals on Wheels
or other Ministry of Health home-based assistance
then this means that the client cannot gift in recognition of care.
Receiving Career Support (formerly Aid to Families, Respite Care, Alternative Care
or 28 Days Relief Care) does not disqualify the older person
from gifting in recognition of care.
For more information see:on the www.workandincome.govt.nz and use the directory
- Verification of care
- Recognition of care details form
- Example
Residential care subsidy
Introduction
Qualifications
Application process
- Client unable to sign form
- Re-applications
- Application received after death
- Documenting decision
- Income and asset testing
- Cash and readily realisable assets
- Bonus Bonds
- Granny flats
- Life insurance annuities
- Paying into a life insurance policy
- Loans
- Capital payments from family trusts
- Maori Land
- Pre-paid funeral trust funds or accounts
- Property
- Farms
- Sale of family home to re-purchase
- Definition of income
- Income excluded
- Determining net payment of income
- Income from rental
- Family trusts
- Partners earnings from employment
- Deprivation of income or assets
- Income or assets unable to be recovered
- Calculating 5 year period
- Example - gifting
- Example - extraordinary gifting
- Recognition of care
- Verification of care
- Example - recognition of care
- Residential Care Subsidy loans
- Repayment calculation
- Examples - repayment calculations
- Deferred loan repayments
- Sole title
- Joint tenancy
- Licence to occupy
- Tenants in common
- Joint family homes
- Ownership by a trust or company
- Payment
Assigning a client's benefit
Extra Help
Personal allowance
- Payment of personal allowance
Clothing allowance
Client with a partner
- Summary rates of payment
- Special Disability Allowance
- Clients who cannot receive Residential Care Subsidy
Payment to partners where Residential Care Subsidy is not payable
Changes and reviews
Returned mail
Client mail via agent
- Payee mail
- Provider mail
- Internal Review
Who should carry out the internal review
Effect of the outcome of internal review
Time standard for internal review
Report for the Benefit Review Committee
Benefit Review Co-ordinator
Who is the Benefit Review Committee
Benefit Review Committee hearing
Notification of decision
Time standard for Benefit Review Committee decision
Appeal Authority Process
- When to advise a client of their right to review
- Who can apply for a review or appeal
- Three months to apply for a Review of Decision
Application out of time
- Client wishes to withdraw application for review
- When to request legal advice
- Review of decision for debts