Welcome to our March newsletter,
Apart from a week of torrential rain we are still managing to enjoy the benefits of the summer months and here at Davenports West we are continuing a busy start to the year. We know that when life gets busy we can overlook the less important matters in our lives especially regarding our future. Residential Care can often cause a headache, whether it is for yourself or for your parents. Either way it is an important matter to consider well before it is required.
With New Zealand’s ageing population the demand for rest home care has increased significantly. This increased demand has led to changes to the Residential Care Subsidy rules as the financial burden on the government grows. In order to receive a government subsidy for residential care a single person’s asset pool must be less than $219,889.00. If eligible and once receiving the subsidy that person will no longer receive all of their Superannuation, the majority of which will go to the care organisation.
Previously families have used trust structures to ensure that those needing residential care would be eligible for the subsidy. This is no longer successful and such structures may not guarantee entitlement to the subsidy. The subsidy is now both income and asset tested and also looks into any trust structures in place. If the Ministry of Social Development is satisfied that the purpose or one of the purposes of a trust was to intentionally deprive a party of assets in order to ensure that they eligible for the subsidy it is likely those assets will be brought back into the asset pool.
The costs of residential care can be very significant and families need to plan for the eventuality financially. Many are unaware that the financial threshold for the subsidy is relatively low. For a single person who has significant assets such as a home but only a little cash may be required to sell the family home in order to fund the residential care.
If you have any questions regarding this matter or any other matters we would be more than happy to assist with you.
Kind regards
DAVENPORTS WEST LAWYERS LIMITED
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