The starting point in New Zealand is that a person is responsible for paying for their own residential care. However, government support may be available depending on the person’s age, care needs, assets and income.
The main form of support is the Residential Care Subsidy. This helps with the cost of long-term residential care in a rest home or hospital. It is paid directly to the care provider by Health New Zealand, not to the resident personally.
A person may qualify if they are aged 65 or older, or aged 50 to 64 and single with no dependent children. They must also be assessed as needing long-term residential care for an indefinite period and be receiving contracted care services.
For most people aged 65 or older, Work and Income completes a financial means assessment. This has two stages. First, assets are assessed. If the person’s assets are below the relevant threshold, income is then assessed to work out how much a person must contribute each week.
The current* asset thresholds are:
- $291,825 or less for a single person aged 65 or older
- $291,825 or less combined for a couple where both partners are in long-term residential care
- $159,810 or less where one partner is in care and the other is not, if the family home and car are excluded
- $291,825 or less where one partner is in care and the other is not, if the family home and car are included.
*Note: As of July 2026. These figures change over time.
The family home is often the biggest issue. It is not always automatically protected. If the applicant has no partner, or both partners are in long-term residential care, the family home and personal vehicle are generally included as assets. If one partner remains living in the family home, the applicant may choose whether to exclude the home and car and use the lower threshold, or include them and use the higher threshold.
The family home can include more than a standard house. It can include a property occupied under a Licence to Occupy (LTO) or Occupation Right Agreement (ORA), a life interest in property owned by a trust or estate, an apartment, granny flat, motor home or boat.
Assets that may be counted include:
- Cash and savings
- Investments and shares
- Life insurance policies with a surrender value
- Loans made to others, including family trusts
- Boats, caravans and campervans
- Investment properties
- Property held through an LTO or ORA
- Refundable accommodation deposits or bonds
Some assets may be excluded, including personal belongings, household furniture and effects, and pre-paid funeral expenses of up to $10,000 each for the person and their partner if held in a recognised funeral plan.
If a person does not qualify for the Residential Care Subsidy because their assets are above the threshold, a Residential Care Loan may be relevant. This is an interest-free loan secured over the person’s home and paid directly to the rest home. It is usually repaid when the person dies or the home is sold, whichever happens first. It is not automatic, and Work and Income considers each application on a case-by-case basis.
Families should also check the admission agreement carefully. The maximum contribution applies to contracted care services, but some costs, such as premium room charges and personal services, may be extra.
The key message is that care costs should be considered early. Families need to understand what is owned, how it is owned, whether the home may be included, and what records will be needed.
This article provides general information only and is not legal advice. Families should obtain advice specific to their circumstances
