The Residential Care Subsidy was introduced to assist people assessed as needing long-term residential care, in a hospital or rest home, with the financial costs of their care. The Subsidy is financially means assessed, and you qualify if you have both assets and income under certain thresholds.
Asset thresholds have increased each year since 2005. As at July 2022, you must have assets below $256,554 (including your house and car) if you are single or if you and your partner are both in care. If you are a couple with one partner in care and one still living in your family home, you can choose between the $256,554 threshold or a threshold of $140,495 excluding your family home and car. You are also entitled to have an amount of up to $10,000 each set aside in a prepaid funeral or in a funeral trust which is not included in your asset assessment.
If you are under the asset threshold then an income assessment is applied. Any income you and your partner receive will be assessed. Income received from your assets is also included except for the first $1,114 for a single person, $2,228 for a couple where both partners are in care or $3,341 for a couple where one partner is in care. Income received from paid employment of the partner who continues to live in the community is also excluded.
You are still presently able to make gifts in the period leading up to your application for a subsidy, but the assessment will include “excess” gifts as part of your assets. Gifting of up to $7,000 per couple per year made in the five years before you apply for a subsidy is not counted in the financial means assessment. Any gifts made above this total of $35,000 per couple over the five years will be considered “excess” gifts and will be included. However if you and your partner are both assessed as requiring long term residential care and are applying for a subsidy at the same time, this limit doubles to $70,000.
Any gifts of more than $27,000 per couple, per year, made before the five year period are considered “excess” gifts and are included in the financial means assessment.
If you are looking at making a gift to a family member or settling assets into a Trust, or winding your Trust up, Harmans have a team who understand the implications of these decisions and how they may impact on you. We can also assist with the completion of an application for a residential care subsidy and to set up a funeral trust if required. Give our Seniors Law Team a call on 03 379 7835 to arrange an appointment to discuss your situation.
The information contained in this site is provided for informational purposes only, and should not be construed as legal advice on any subject matter.