Will I be entitled to a Residential Care subsidy?
Oct 10, 2023
If, in your later years, you require full-time care in a rest home, hospital, or residential programme, you may be able to receive some
funds from the government to cover the costs. There are, however, certain criteria to determine eligibility. We are often asked by clients
whether they will be entitled to a Residential Care Subsidy—a very fair question for those making financial decisions.
Unfortunately there’s no easy answer. The Ministry of Social Development has a large amount of discretion when considering specific cases. Additionally, changes are not uncommon.
There are three primary financial criteria that determine whether you will be eligible:
- The Assets Means test
- The Income test
- The Deprivation of Assets or Income test
For those considering setting up a trust, remember that you can gift up to $27,000 per year per couple. However, if you plan to apply for a care subsidy, take note: any gifting over $7,500 per year in the five years before applying for the subsidy will be added to the applicants’ assets.
If you’re approaching the age where this may become relevant, we recommend seeking advice from finance professionals like the Malloch McClean team. And the greater your assets, the earlier you should start planning—it would take 37 years to gift a million-dollar property to a trust at $27,000 per year.
Don’t qualify for the Residential Care Subsidy? There may be other forms of assistance you are eligible to receive. Get in touch with the Malloch McClean team to have these and other questions answered.