Paying for Aged Care in NZ

📋 The Residential Care Subsidy

How It Works

The Residential Care Subsidy, administered through Work and Income, helps pay for residential care for people assessed as needing it whose assets and income are under the thresholds. There is also a separate clinical needs assessment to confirm the level of care required.

The Asset Thresholds

There is an asset threshold, and the level differs depending on whether you choose to include or exclude the family home and car in certain situations, such as when a spouse still lives there. The exact figures change each year, so the rule is to check the current thresholds rather than rely on old numbers.

Income and the Cap

Even when the subsidy applies, you generally contribute most of your income toward the cost, while the government tops up the rest. There is also a maximum weekly amount you can be charged for care, which protects you from unlimited fees.

🧮 Paying Your Own Way and Planning

If You Are Over the Thresholds

If your assets are above the threshold, you generally pay for your own care until they reduce to the threshold, at which point you may then qualify for the subsidy. This is why the family home is often a central part of the picture, since it is a major asset.

Beware of Trying to Hide Assets

Some people consider gifting assets to fall under the thresholds. Work and Income can look back at gifting and may include gifts above allowed limits in the assessment. Trying to game the system can backfire, so get proper advice rather than acting on assumptions.

Plan Early

Aged care is easier to navigate when planned for, alongside wills, enduring powers of attorney, and clear family conversations. See our estate planning material, and the NZ Government Benefits reference for current support, and confirm thresholds with Work and Income.

💡 Common Mistakes

Mistake 1: Assuming Care Is Free

Care is heavily subsidised for those under the thresholds, but those above generally pay until their assets reduce. Do not assume it is fully covered.

Mistake 2: Relying on Old Thresholds

The asset and income thresholds and the weekly cap change each year. Always confirm the current figures.

Mistake 3: Gifting Assets to Qualify

Gifting to dodge the means test can be counted back and the rules are complex. Get advice rather than risking it.

Mistake 4: Leaving Planning Too Late

Decisions made in a crisis are harder. Planning ahead, with wills and powers of attorney, makes everything smoother.

A Simple Approach

See our Wills and Estate material for the related planning. Final word: aged residential care is costly, but the Residential Care Subsidy helps those under the asset and income thresholds, with a weekly cap on care fees. Those above generally pay until their assets reduce. The thresholds change and the rules around the home and gifting are detailed, so check current figures and get advice. This is general information, not legal or financial advice.