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Removal of asset testing a progressive step

Removal of asset testing a progressive step

The coalition government's proposed law to progressively remove asset testing for people aged 65 and over in long-term residential care from July 1 next year is a good example of the benefits to New Zealand of constructive coalition government under MMP, Progressive President Grant Gillon says.

"Under First Past The Post, both National and Labour governments were able to ram through laws which were unfair on working families that had worked hard all their lives to save something to give to their children.

"It is unfair that people aged 65 and over who don't have expensive lawyers and elaborate family trusts are required to use up their assets to contribute to the cost of their care, whereas those with family trusts in exactly the same position can avoid paying. The progressive removal of asset testing will progressively put most New Zealand families back on the same playing field those with expensive lawyers and family trusts," Grant Gillon said.

"The advent of MMP allowed the Progressives the ability to get into coalition government to staunchly advocate for the comprehensive elimination of asset and income testing - the fruits of which we are now beginning to see. By playing a constructive role inside the government over the past four years, we are now seeing part of our programme implemented," the Progressive President said. The Progressives will continue to campaign for the end of income testing for New Zealanders medically assessed as needing long term hospital care.

Under the legislation, from 1 July 2005, single people and couples with both partners in care will be able to keep up to $150,000 in assets before their assets are used to contribute to the cost of their care, up from $15,000 and $30,000 respectively. Couples where one partner is in care will retain their current exemptions of a house and car, while their cash asset exemption will rise from $45,000 to $55,000. The exemption thresholds for all groups will then increase by $10,000 a year, progressively removing asset testing. The government's Bill is before the Social Services Select Committee where public submissions will be heard.

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