Help for overseas pensioners in care

Health Minister Pete Hodgson today introduced planned new laws which will mean that people receiving private pensions from overseas will be better off financially if they receive Government funded care for long stay residential care.

"This Labour-led government is committed to providing high-quality affordable care for all older New Zealanders," Pete Hodgson said. "Our older people deserve certainty about how much they will need to contribute to the cost of their care."

The Social Security (Long-term Residential Care) Amendment Bill makes a number of amendments to the Social Security Act 1964.

Overseas private pensions will be treated the same as New Zealand private pensions, that is, 50 per cent of both will be excluded as income when determining how much an individual should contribute towards the cost of care.  Previously 100 per cent of overseas private pensions were treated as income.  

The proposed law clarifies that older people who as assessed as needing long-term residential care indefinitely, and who are receiving their care in a DHB-contracted facility, will pay no more than the maximum weekly contribution (currently set regionally between $640 to $700 a week) for their care.

The maximum contribution caps the weekly amount that individuals must pay towards their care. The amendment makes it clear that, even if people have assets of more than $150,000, they will pay no more than the maximum contribution for standard residential care services.

The Government component of the cost of care for approximately 28,000 people for age-related residential care for 2005/06 is $539 million (GST exclusive).  In addition, the Government is funding DHBs for the impact of income and asset testing changes implemented from 1 July 2005, which is likely to increase government expenditure by a further $93 million (GST exclusive).            

Background Information

A purpose and overview statement makes clear the purpose of Part Four and Section 27 of the Social Security Act – the part which covers long-term residential care.

Changes will also be made to ensure that, once someone has been assessed as being eligible for the residential care subsidy, they will remain eligible for it.

Another change will mean that discretion may be applied in assessments where property and income may have been disposed of for the purposes of income and asset testing.

The amendments will clarify that younger people in disability-related residential care can receive the Disability Allowance on the same basis as those in the community. This will give effect to recent decisions of the Social Security Appeal Authority.

Other changes will enable people who are exempt from income and asset testing because of their circumstances to retain a personal weekly allowance, as can all other residents.

Ends

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