Residential Care Subsidy – Court of Appeal Update 

Grange Associates Ltd - 25 October 2013

In an update to our previous article Residential Care Subsidy & Gifting – High Court Ruling, on 2 September 2013 the Court of Appeal upheld the High Court’s ruling on gifting and residential care subsidies.

The case is not being appealed and as such, the Court of Appeal’s decision reflects the current position with regard to gifting and residential care subsidies, being:

  • Where couples have previously gifted a combined total of $54,000 per year, the Ministry may determine that deprivation has occurred and will do a means assessment.
  • When undertaking a means assessment on application for a residential care subsidy, any gifts made in excess of $6,000 per annum in the five years preceding the application and any gifts in excess of $27,000 at any time prior to that are able to be brought into the asset calculation.
  • The above gifting threshold applies to the combined gifting of the applicant and their spouse.
  • Gifting is now limited to $27,000 per couple per annum in order to avoid any gifts being brought back into the asset calculation. 

Current Residential Care Subsidy Thresholds

For a single person going into care

A subsidy is available for a person who does not have assets of more than $215,132. Certain assets, such as pre-paid funeral expenses of less than $10,000 are exempt from the asset calculation.

Where both spouses require care

The subsidy is available where the combined assets of the couple do not exceed $215,132 including house and car but excluding exempt assets as noted above.

Where only one spouse requires care

The subsidy is available if the combined assets of the couple do not exceed $117,811. This figure excludes any interest in the house that the spouse of the person requiring care will live in and their car as well as the exempt assets noted above.

However, the applicant can instead choose to use the asset threshold of $215,132 including the value of the house and car.


Back to Top

All information is correct at the date of article publication. Please note we provide the information as a service only. Accordingly, the contents are not intended as a substitute for specific professional advice and should not be relied upon for that purpose.   

 Back    |    Print this page

We invite you to:


 Join our mailing list

 Bookmark us (hit Ctrl+D)

 Phone us on 09 6233144


We are proud members of the New Zealand Institute of Chartered Accountants. We adhere to their ethics, standards and practices.


We make an annual donation to Auckland Rescue Helicopter Trust in the name of our clients and are recognised as a corporate supporter.