Residential Care Subsidy

 
Income & Assets Testing Regime

• Assessment of the Individual (Support Mix Group)
  • Levels 1 & 2 care can be managed in the community
  • Levels 3 & 4 usually require Rest Home care
  • Level 5 requires Hospital care
    
    
• Government will fund in line with the assessment of the individual's needs
  • Stage 2 Rest Home care $76/day
• Stage 3 Rest Home care (in dementia/ secure unit) $91/day
• Hospital care $126/day (these figures are as at November 2000)
  
  
• Applies to people over 65 years. (sometimes applies to people 50 - 64 years age group)

• Maximum amount anyone has to pay is $636.00 per week. (Top up subsidy). This is not means tested. It applies to people assessed at Level 5 who require Hospital care.
  
  
• The cost of a pre-paid funeral is exempt from the assets test. Up to $10,000 (for each partner) can be set aside with a Trustee Company or Funeral Director for this purpose.
  
  
• The test is different for single and married people and those with dependent children.

• If single or widowed:
  • assets must not exceed $15,000.00
  • any income received will be used to pay the cost of care up to $636.00 per week.
    
    
• If married and one partner is in residential care:
  • joint assets must not exceed $45,000, and
  • any income over $28,972 (a higher limit if there are dependent children) is looked at.
  • The family home is not considered in the assessment if a partner or a dependent child is living in the family home.
    
    
• If married and both are in residential care the income and assets test looks at:
  • assets worth more than $30,000 and
  • any income received.
  
  
• There is an allowance of about $27.00 per week for personal necessities and $190.00 p.a. for clothing.

• An older person can gift up to $5,000 per annum (retrospective for up to 5 years, with prior WINZ approval) to non-core family members in recognition of full time care given before entry into long term stay.

• Income Support will require a declaration as to gifting or assets disposed of over the last 5 years prior to entry into long term care (although the 5 years is an arbitrary date) and may wish to inspect any Family Trust documents.

• If the home is not sold then Income Support can enter into an agreement to mortgage the house to cover payments with the advances repayable on the sale of the home or death of the beneficiary.

A suggested strategy for a married couple to minimise the impact of Residential Care Subsidies:

(a) Set aside at least $5,000.00 (preferably $10,000.00) for each partner in a Funeral Trust with either Guardian Trust or Public Trust.
(b) Separate out investments into accounts in separate names
(c) Register residence as a tenancy in common (in equal shares)
(d) Then re-write will to provide a life interest for the survivor With provision to substitute the residence And for the capital in the estate to go direct to children on the death of the survivor

This strategy would be applicable where a Trust is not recommended.