Residential Care Subsidy in New Zealand: what should families check?
The Residential Care Subsidy may help pay for qualifying long-term care in New Zealand, but eligibility depends on care needs and the applicable financial assessment. Families should check current asset limits, income, past gifts and trust involvement before making decisions. Transferring a home or setting up a trust does not guarantee eligibility.
Where should a family start when long-term care is needed?
Start with the care-needs assessment and current Work and Income guidance, rather than an assumed financial outcome. Work and Income assesses finances where required; Health New Zealand pays an approved subsidy directly to the contracted care provider.
Prepare a shared timeline of the proposed move, the assessment and the paperwork still needed. Ask the provider which costs the proposed arrangement covers. A family should understand its commitments before signing, even where a subsidy application is planned.
What are the current asset thresholds?
Work and Income’s current published limits for people aged 65 or over are set out below. These figures were checked on 28 October 2026; recheck them when applying.
| Circumstances | Published asset limit |
|---|---|
| Single, or both partners in long-term residential care | $300,811. |
| Partner not in care; qualifying family home and car excluded | $164,731. |
| Partner not in care; family home and car included | $300,811. |
The relevant assessment considers the applicant’s and partner’s position. Passing the asset test does not finish the assessment; income also matters. Different rules apply to eligible people aged 50–64. Confirm which pathway applies with Work and Income.
Do gifts made more than five years ago stop mattering?
No. Work and Income’s policy distinguishes the five-year period immediately before application from earlier gifts. Its current allowance within that period is $8,500 a year per application; for a couple with only one application, that is a combined allowance, not $8,500 each.
Before that five-year period, the published allowance is $27,000 in a year, combined for a couple. Excess gifts can affect the assessment. These rules are not permission to assume a particular transfer will be ignored; special situations, including gifts recognising care, need specific advice.
Gather the history before making another gift. Records should identify dates, recipients, values and whether the transfer was a gift, loan, debt forgiveness or sale. A vague recollection that “we gave it away years ago” may not answer the assessment questions.
Does a family trust protect the home from assessment?
A trust does not guarantee subsidy eligibility. Work and Income asks about trust involvement and transfers. Tell your advisers about any trust, outstanding debt owed to you and past gifting rather than assuming the trust can be omitted.
The useful task is to understand the existing arrangements and their consequences. Our family trusts and asset-protection services can help review the documents alongside the care plan. Do not transfer assets merely to fit a threshold without advice.
What if most of the family’s value is tied up in a home?
Ask whether a Residential Care Loan is available in your circumstances. Work and Income describes it as an interest-free loan secured by a caveat over the home, subject to individual assessment and repayment obligations. It is different from a subsidy and is not automatically approved.
Before choosing an approach, compare the care costs, available cash, property arrangements and consequences for anyone living in the home. Obtain advice on any agreement you would need to sign and who has authority to sign it.
What documents should you prepare for advice?
Bring the care assessment information, proposed provider agreement, bank and investment records, property details, trust documents and the gifting history. Include any Enduring Powers of Attorney and explain who is currently managing the person’s finances.
- Identify missing records before application forms are completed.
- Record questions about the home, partner and existing family arrangements.
- Review authority to act and any upcoming signing deadline.
- Coordinate legal advice with the care provider and Work and Income process.
Our estate-planning team can help connect the documents and family arrangements. Contact Canterbury Legal for a review tailored to the decisions you need to make.
What other questions do people ask?
Does being under the asset limit guarantee a subsidy?
No. Care eligibility and the applicable income assessment also matter. Confirm your position through the current assessment process.
Can my partner and I each give away $8,500 a year before one application?
The current five-year gifting allowance for one application is combined for the couple. Do not assume each partner receives a separate allowance. The rules differ where both apply.
Is a Residential Care Loan the same as the subsidy?
No. A loan has security and repayment obligations and needs individual approval. A subsidy is a different form of assistance with eligibility requirements.
Which official sources explain these rules?
- Work and Income: Residential Care Subsidy and current asset limits
- Work and Income policy: gifting periods and couples
- Work and Income: current allowable gifting amounts
- Work and Income: Residential Care Loan
Information checked on 28 October 2026. This article provides general information about New Zealand law and is not a substitute for advice about your circumstances.
