History
During the National_New Zealand First Coalition , Bill No. 150-1 which removed all asset testing from the asset and income testing regime for long term hospital care of the elderly , passed the first two readings and was in the Select Committee stage and due to be reported back to Parliament just before the coalition fell apart.
National chair of the Select committee involved announced that the Bill , as it was promoted by New Zealand First would never emerge from the select committee stage and it hasn't and didn't.
Promises
In 1999 the then Labour opposition stated " If the current National Government removes the test for some people , Labour will take that as a first step and legislate to remove other asset tests within its first term. If the current Government does not , Labour will introduce legislation in its first term to remove asset testing for all those seniors in need of residential care."
Note that the promise was to remove not phase out. !
Present information
The latest information is from a Cabinet Minute of Decision which shows that the present intention is to phase in the removal of asset testing, with the first 13 weeks of care to be free as from July 2004 and that unspecified adjustments to this 13 weeks would be made at intervals of a maximum of three years.
The regime itself
The regime applying to the long term care of the elderly only applies to some 6% of the elderly population but notwithstanding that, it is blatant discrimination against the elderly as it is age based and is only legal because the discrimination has been passed into law and in any court case the judge is required to uphold the law no matter how bad the law.
The regime is little understood basically because most people consider it will never happen to them and most complaints come from family when they find that for the last surviving partner , usually the mother ,the family home has to be sold to pay for care. .
Currently if one partner is assessed as needing long term care then the Deputy General of Social Services is required to determine whether the person can pay for their own care at a rate not exceeding $636 per week. This amount is required to be paid to the provider of care until the assets and income excluding the house and car are reduced to $45,000.
If the both the partners are assessed as needing care then this amount per person is paid until the assets and the income including the house and car are reduced to $30,000.
If the surviving partner is assessed as needing care then the assets and income including the house and car are reduced to $15,000.
In actual fact the social services DG does not collect the information about the residents assets and income as the rest home / hospital charges the resident privately until the assets are reduced to the level nominated at which time an application is made for subsidised care and then the level of assets have to be declared to prove their value.
The future
In 2002 the situation remains exactly the same as in 1999 in that nothing has happened . despite the firm commitment being give to remove asset testing in the first term of the Labour government. Now we have a change of stance and are now told that fiscal prudence is required so that the removal of asset testing will be phased in over a time scale as yet undetermined.
Current position
It is the second term of the Labour GOvernment and we are now promised that legislation will be introduced before the end of the year.
Prior to the election some detail of the proposals were obtained .
It is considered that the current proposals are unacceptable and that if a phased removal was to be acceptable the minimum first step would be to remove the house as a part of the asset reduction requirement and at the same time raise the thresholds to a much higher figure.
The Minister proposing this legislation has been approached - basically the government fiscal prudence argument is not accepted as it is believed that there are no figures available which would actually determine how much the removal of assets would involve - for instance there would be some people that would be paying for their care, either in total or part , from an income stream and this under the current proposal to retain income testing would continue.
How can one claim fiscal prudence when there are no figures of how much is paid from income and how much is paid by selling assets ?
For your information we give below the Cabinet minute of decision that applies.
CAB MIN (02) 15/8
Minute of decision
2. Noted the additional information tabled by the Ministry of Health on the average length of stay (ALOS) of subsidized people in long-term residential care , which indicates that the ALOS has been slowly reducing over the past decade for an average stay of about 2.7 years in 1989 to about 2.0 years in financial year 1999/2000.
5. agreed it is legitimate that people contribute to costs associated with long term residential care.
6. agreed that income testing should remain in place as a mechanism for individuals to contribute to the cost of residential care .
7. noted that income testing requires justification under Bill of Rights Act.
8. agreed in principle subject to further work in paragraph 11 below , to waive asset testing over time , beginning with waiving the asset test for the first 13 weeks in care , with progressive adjustments to the current asset testing regime until full removal in the medium term , with an adjustment made at a maximum of every three years.
9. agreed that the changes will not be retrogressive nor involve refunds of previous payments.
10. noted that there will be increased administration costs in implementing the proposal referred to in paragraph 8 above because of requirements for implementing the waiver.
11. directed officials to report to Cabinet Education and Health Committee ( EHC) by June 2002 with details of the proposal paragraph 8 above , including advice on phasing intervals.
12.1 the first step in implementing the removal of assert testing for long term residential
care should come into effect from July 2004
12.2 the asset testing of people 50-64 years and deemed to be " like in age and interest"
is priority for removal
12.3 the removal of asset testing is an additional requirement falling outside the Health
Funding Package 2002/03 - 2004/05 and funding for implementation will need to be identified
from source other than Vote Health as determined by Cabinet.
14. agreed that the legislation be included in the 2002 Legislation Program with a priority 4 ( to be referred to select committee in 2002)
15. agreed that the legislation vehicle be the Social Security ( Removal of Asset Testing for Long Term Residential Care ) Amendment Bill , a bill to amend the Social Security Act 1964
16. agreed that following Cabinet discussions on detailed policy , officials will report to Cabinet Legislation Committee by August 2002 with draft legislation.
17. noted that Alliance Members may move amendments in the House ( at the committee stage ) to better achieve Alliance policy in relation to long term Residential care.
20. directed officials to report to EHC as part of the 2004/05 budget with proposals for improved community and home-based services , to be in place as the asset test is removed progressively and other incentives to support the appropriate use of residential care , noting that there are risks to be managed within the Health Funding Package.
21. noted that in 2002/03 the Ministry of Health is consulting with relevant agencies , will undertake a review of policy and funding long-term care for older people in the future including the level and scope of private contribution to different type of care
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