Table of Content
- Pre-paid funeral trusts
- Step 2 - We'll check what assets you have
- Deprivation of property and income rules
- Rest home care subsidy thresholds still unclear - lawyer
- Who pays for the cost of the resident’s care while awaiting the outcome of a financial means assessment?
- Asset test (financial means assessment as to assets)
The holder of an enduring power of attorney who acts under the enduring power of attorney in relation to the property of B or B’s spouse or partner. An application for a means assessment must be made on a form provided for the purpose by MSD and the applicant must supply any supporting evidence or information that is reasonably required by MSD to complete the assessment. A person who has been positively needs assessed may apply to MSD for a means assessment. May at any time on its own initiative conduct a needs assessment of a person who could apply under subsection or . A person who is a special case person may at any time apply for a needs assessment. A person is funding eligible if the person belongs to a class of eligible people specified in regulations made under section 102 of the Pae Ora Act 2022 or is eligible under a ministerial direction continued under clause 30 of Schedule 1 of that Act.
Gifting includes the common usage of the word and also the forgiveness of debts, including to a Trust. If an asset, such as a family home, is transferred to a Trust, the Trust owes the transferors the value of that asset. This debt is “paid off” without exchange of funds, but rather by forgiveness of the debt. MSD will consider the history of an applicant’s gifting of assets (“gifting”) to assess whether or not it considers the applicant has engaged in “excess gifting” to deprive themselves of assets with the purpose of qualifying for the Subsidy.
Pre-paid funeral trusts
The rules relating to gifting for someone who applies for Residential Care Subsidy are quite different to those used by Inland Revenue. While applications are considered on a case-by-case basis, your home would need to be worth more than $256,554 and you must not have assets worth more than $15,000 , or $30,000 . When you are in care, your superannuation will go towards your rest home care. The cost of the person’s regular essential expenses , calculated on an annual basis. An application made under section 69FA of the Social Security Act 1964 and not withdrawn must, if the assessment under Schedule 30 of that Act has not begun on the repeal of that section and that schedule, be treated as if it were an application under section 60.
Nothing in this Act affects the liability of a person to pay, under an agreement between that person and a provider, for any services provided to that person that are not contracted care services. To understand the significance of the case it is necessary to know more about the way claims to residential care subsidies are limited. Briefly the Social Security Act and Regulations provide that if a claimant’s means exceed a threshold figure, they lose the right to a care subsidy until their excess assets have been applied towards the costs of care. If an applicant has transferred an asset to a Trust and has not completed forgiving the debt, the outstanding value is considered a personal asset. Furthermore, if an applicant has gifted in excess of the gifting thresholds, the value of the excess gifting over the gifting threshold may also be considered a personal asset.
Step 2 - We'll check what assets you have
This applies from the date the person is assessed as requiring that type or level of residential care or the date they begin receiving contracted care services. The rest home or hospital will then refund the person for the cost of care for this period only. A qualifying person whose assets as determined by a means assessment under section 34 are above the applicable asset threshold must contribute the maximum contribution for as long as that person’s assets are above the applicable asset threshold. Under the Residential Care and Disability Support Services Act 2018 a ‘resident’ who is needs assessed as requiring residential care indefinitely is liable for contracted care costs provided to them up to the maximum contribution amount. The care costs are capped at the amount of the maximum contribution unless the resident has agreed to pay for additional services that are not contracted care services.
This was the subject of the recent decision of the Court of Appeal that clarified the meaning of ‘deprivation’ in the context of the MSD’s income assessment. Qualify for other payments after you go into care, if they aren't getting any payments from us. If you don't know what's included in the cost of your care, you should talk with your rest home or hospital.
Deprivation of property and income rules
They can however, be subject to scrutiny if there have been excess gifts, or if the trust derives an income. Debts can be offset against your assets, however this is at MSD’s discretion. The debts usually need to be third party debts, or connected directly to an asset disclosed in your asset test such as home loans , utility bills or personal loans with institutional lenders. MSD must calculate the amount of the person’s annual income and specified outgoings, and must deduct the amount of the specified outgoings from the annual income. A person’s weekly income is the person’s annual income divided by 52.
MSD consider it may calculate a notional income charge using the Reserve Bank six-month term deposit rates and crystallise this amount into a deprived asset. MSD has developed a 3-step test to determine if deprivation has occurred and how much, if any, deprived amounts will be included. Rather, MSD can only look at the steadily reducing portion of the debt over time and then determine, in light of that, what a reasonable current income figure should be in the present day. You must continue to pay for your care until your application for Residential Care Subsidy has been approved. The Ministry of Health has confirmed that your care costs $900 a week. Your gifts in recognition of care cannot be more than $35,000, when combined with other allowable gifting in the last 5 years .
Residential care subsidy thresholds, trusts and gifting
If your partner applies at the same time, this amount will double to $70,000 (but we won't count $35,000 each if you apply at different times). This is the first part of what we call a 'Financial means assessment'. If we need to assess your assets or income, you will be given a 'Residential Care Subsidy application for Financial Means Assessment' form at your appointment. $256,554 or less, if you do want to include the value of your house and car. Overview Take a look at the range of benefits and payments we have available.
In respect of the cost of an elderly victim of crime’s LTR contracted care, the funder must pay the full cost. This section does not apply to a special case person (who, under section 22, 24, or 26, is not liable to contribute from that person’s assets). Where property maintenance costs are paid in exchange for occupancy of the property, MSD would generally consider this a rental agreement, not free accommodation, and not offset these amounts. It is paid directly to the hospital or rest home by the Ministry of Health.
Health and disability If you want to work, we can support you to find the right job for you. Residential Care Subsidy — including information about asset limits. You are 65 years of age or older and your assets are within certain limits. You are between 50 and 64 years old, single, and have no dependent children.
Once you have been assessed as needing long-term residential care in a hospital or rest home you will need to complete the Application form including the means assessment. A qualifying person or special case person whose spouse or partner is not a qualifying person or special case person may elect to have Threshold A in clause 1 apply to P instead of having Threshold B in clause 1 apply. Whose spouse or partner is not a qualifying person or special case person but who has elected, under clause 2, to have Threshold A apply to P rather than Threshold B. MSD is satisfied that the person or the person’s spouse or partner has directly or indirectly deprived the person of any income or assets. The income of a person who is in a relationship includes the income of the person’s spouse or partner. A person who is an elderly victim of crime is not liable to contribute any amount to the cost of that person’s LTR contracted care and a funder must pay the whole of that cost.
Where this is so, the resident remains liable to pay for these additional services. An income assessment is required if an assets assessment has determined that a person’s assets are equal to or below the applicable asset threshold. The claimant applied for the residential care subsidy on the basis that her personal assets were below the “threshold” of $180,000 (since increased to $213,297). Many years before, the claimant and her spouse established a trust into which they each gifted $27,000 per annum. In assessing the claimant’s application for the residential care subsidy, the Ministry clawed back half of those gifts, effectively requiring that they be expended in meeting costs of care before a subsidy was available.
This is a very specialised area of law, and each persons’ structures and circumstances are different, so each application warrants an individual approach. If there is a family trust or gifting involved then we recommend that you take legal advice prior to submitting an application to MSD, to ensure that you have provided the relevant information. There are many factors to consider, and the examples used may not apply in your situation. If the total value of your assets under the applicable asset limits, then you are able to move on to the second stage of the means assessment, the income test. Qualifying persons who have entered into a loan agreement with the Crown under the residential care loan scheme. MSD is satisfied have not been realised by that person, or by that person’s spouse or partner.
Who pays for the cost of the resident’s care while awaiting the outcome of a financial means assessment?
MSD must convert an assessment made under clauses 3 to 5 to a weekly amount. Who has not elected, under clause 2, to have Threshold A apply to R. An application made under section 144 of the Social Security Act 1964 for a means assessment and not withdrawn must, if the assessment has not begun on that section’s repeal, be treated as if it were an application under section 32. An application made under section 137 of the Social Security Act 1964 for a needs assessment and not withdrawn must, if the assessment has not begun on that section’s repeal, be treated as if it were an application under section 27.
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