Qualifying for a residential care subsidy - Understanding the exemptions for the asset threshold

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Resthome care subsidy LawyerFor those people aged 65 years and over who require long term rest home accommodation or hospital care, it is important for many of them that they qualify for the residential care subsidy offered by Work and Income New Zealand (WINZ). Without the subsidy, the expensive costs of residential care must come from your own assets.  There are exemptions, which may allow you to fall below the asset threshold to qualify for a subsidy.

Asset thresholds for single people, or couples with both partners in residential care
If you are single or you have a spouse or a partner who is also in long term residential care, then there is an asset test threshold of $215,132.00 or less to qualify for the residential care subsidy.

Asset thresholds for couples with only one partner in residential care
If you have a spouse or partner and only one of you is going into residential care, there are two asset thresholds.  You can choose which of the two to be assessed by depending on how your assets are held.  The two thresholds are - a combined total assets of $117,811.00 excluding the value of your house and car, or a combined total assets of $215,132.00 which includes the value of house and car.

The above asset thresholds are adjusted by inflation at 1 July each year.

What if your assets exceed the threshold?
If your assets exceed the threshold then it is important to remember two exemptions which may assist in reducing your total assets to the threshold level and thus qualify you for the residential care subsidy.

Exemptions

Annual Gift of $6,000.00
You are entitled to make an annual gift or gifts for natural love and affection to members of your family or a family trust.  The total of all your gifts cannot exceed $6,000.00 per year.

Your asset threshold will be reduced annually by the amount of such gifts and may assist you to qualify for the residential care subsidy.

Funeral Plan
Many of the banks and funeral homes run pre-paid funeral plans. A pre-paid funeral plan up to $10,000.00 per person is also exempt from calculating the asset threshold.  This means that if, after making this contribution, you fall below the asset threshold you will qualify for the residential care subsidy.

If you do not qualify for a residential care subsidy, you may be interested in looking at a residential care loan.

Planning for old age is important. Smith and Partners have specialist solicitors who can assist you not only with drafting your Will, but also with helping you prepare a retirement plan that takes into account your ability to qualify for the residential care subsidy.

For further advice on the above, please contact Peter Smith by phone on 09 837 6882 or emailpeter.smith@smithpartners.co.nz