You or your loved one may be eligible for a Residential Care Subsidies or Loan. This guide summarises the requirements to qualify for this assistance.
The Residential Care Subsidy (RCS) is government-funding to assist those living in a rest home or hospital-level care pay for their residential care fees. Applications are made to the Ministry of Social Development (MSD).
Once someone has been assessed as requiring long-term residential care in a rest home or hospital, and upon receiving an application, MSD will undertake a financial means assessment to ensure that, where appropriate, people use the resources available to them before becoming eligible for the RCS.
In order to qualify the applicant’s assets must be at or below certain asset thresholds, which are updated annually on 1 July.
The current asset thresholds are:
MSD will include:
Assets not included in the financial means assessment
There are limits to the amount that you and your spouse/partner can gift, these are:
If you and your spouse or partner makes gifts exceeding these limits, MSD may determine that you have deprived yourself of assets and will include any excess gifting as an asset.
Selling an asset below fair value may also result in MSD considering that you have deprived yourself of an asset.
Providing your assets are at or below the applicable asset threshold, MSD will then complete an income assessment. Income assessments are determined differently depending on the type of income.
Money your spouse or partner has earned through work is not considered income.
If you have lent money to a person (including a trustee(s) of a family trust) interest-free, then MSD may determine that you have deprived yourself of income. If so, they may calculate deprived income by using the Reserve-Bank six-monthly interest rates for each year that you did not receive income.
If you have been assessed as requiring rest-home or hospital level care, you own a home and have no more than $15,000 (or $30,000 for an applicant who is in a legal relationship), you should qualify for a Residential Care Loan (RCL).
A RCL is when the Crown provides you with an interest-free loan to cover the cost of your care. It is paid directly to your rest home and is secured by the Crown placing a caveat over the title to your former home.
The loan is repayable when the house is sold, or within 12 months of your death.
Should you require advice about your eligibility for a Residential Care Subsidy or Loan, or require assistance with the application, please contact the Elder Law Team at Gibson Sheat Lawyers.