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Asset testing changes to 30,000 older people

16 May 2005

Letters on asset testing changes to 30,000 older people

The first of more than 30,000 letters have been sent to older people in long-term residential care explaining how they might be affected by upcoming changes to income and asset testing.

The Ministry of Health is writing to residents to ensure they know about the changes and where to get information about the impact on their own care arrangements.

Ministry Health of Older People Manager Judy Glackin said the changes, which come into effect on 1 July 2005, will enable older people to retain more of their assets while still qualifying for a Government subsidy to help meet the cost of care in a rest home or continuing care hospital.

"They are the first step in Government plans to progressively remove asset testing for older people in care."

>From 1 July, single people and couples with both partners in care will be able to keep up to $150,000 in assets (including both property and savings) before their assets are used to contribute to the cost of their care. Couples with one partner in care can opt either to keep $150,000 of total assets or $55,000 of assets plus their house and car. The current levels are $15,000 for a single or widowed person, $30,000 for couples or $45,000 of assets plus house and car for couples with one partner in care. The $150,000 threshold will then increase by $10,000 a year, until asset testing is removed completely.

There are also changes to the maximum contribution people pay for residential care. The maximum contribution was set at $636 per week in 1994 and has not changed since then. From 1 July 2005 the maximum contribution will change to reflect the contract price for rest home care that District Health Boards pay providers. This means that regardless of whether they are in a rest home, dementia unit or hospital, people needs assessed as requiring residential care will only have to pay the price of the District Health Board contract for rest home services in their local area.

Increasing the asset level able to be kept by people in long stay residential care helps protect their assets against the increasing cost of care, which despite increased Government support, will continue to rise. For people who are above the $150,000 threshold, fees will rise in line with any increases that DHBs negotiate, Ms Glackin said.

Government is very aware of the increased costs facing individuals, and which for many will increase again this year, and this is behind the significant Government's investment in older care beginning in July 2005.

Older people in long term residential care will be affected in differing ways by the changes, depending on their financial circumstances. For example, those people currently paying the full cost of their care, or those with a residential care loan, may qualify for a Residential Care Subsidy if they have assets less than $150,000.

Residents are being advised they must continue to pay the cost of their care until it is established that they are eligible for a subsidy, Ms Glackin said.

Further information on income and asset testing can be obtained from the Ministry of Health website at or individuals wanting more information about these changes can call 0800 737 777


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