Residential Care Subsidy and Residential Support Subsidy

Overview

The Government, through District Health Boards, subsidises the costs of residential care for older people and for younger people with physical, intellectual or psychiatric disabilities (including drug and alcohol rehabilitation).

The Residential Care Subsidy provides funding for people who have been needs assessed by a District Health Board as requiring long-term or life-long residential care in a hospital or rest home and are receiving care from a service provider contracted by the Ministry of Health. This funding is available for people who:

• have assets assessed as being at or below the relevant threshold
• are aged 65 or over, or are aged 50-64 years with no dependent children.

The Residential Support Subsidy provides funding via District Health Boards for the costs of contracted disability support and residential services for people with physical, intellectual or psychiatric disabilities (including drug and alcohol rehabilitation). This subsidy is not means tested.

MSD's Work and Income service line is responsible for the financial means assessment to determine whether or not a Work and Income client is financially eligible for the Residential Care Subsidy. If a person is financially eligible, Work and Income then determines whether the client can pay for or contribute towards the cost of their care. This assessment of financial eligibility is separate from the District Health Board's assessment, which determines all other aspects of eligibility for the Residential Care Subsidy.

If a Work and Income client is found to be financially eligible for a Residential Care Subsidy or is receiving disability support or residential services via a Residential Support Subsidy, they must contribute any New Zealand Superannuation or other benefit they receive, less a personal allowance, toward the cost of their care.

Please note that information in this section is restricted to clients of Work and Income who:

• have been means assessed by Work and Income as being financially eligible for the Residential Care Subsidy, or
• are receiving disability support or residential services via a Residential Support Subsidy.

Other people who are not Work and Income clients may have these subsidies following assessment by the District Health Board or the health provider. Information in this section therefore should not be read as complete information on all individuals eligible for, or taking up, these subsidies.

The asset threshold for Residential Care Subsidy was significantly raised for the first time on 1 July 2005. The number of Work and Income clients with one of these subsidies being paid towards the cost of their care is expected to increase as the asset thresholds for the subsidy are increased by $10,000 on 1 July each year.

---

Trends in the number of Work and Income clients with a Residential Care Subsidy or Residential Support Subsidy being paid toward the costs of their care

The number of Work and Income clients with a Residential Care Subsidy or Residential Support Subsidy being paid toward the cost of their care has remained fairly stable over the last two years, following an increase between 2005 and 2006 (see table 4.26). Since 2006:

• around 66% of these clients have been receiving New Zealand Superannuation, while around 28% have been receiving an Invalid's Benefit (see table 4.26)
• around 51% have been aged 80 years or over (see table 4.27).

Table 4.26 Trends in the types of pension or main benefit paid to Work and Income clients with a Residential Care Subsidy or a Residential Support Subsidy

Type of pension or main benefit paid at the end of June	Work and Income clients with a Residential Care Subsidy or Residential Support Subsidy1
	2004 Number	2005 Number	2006 Number	2007 Number	2008 Number
Unemployment-related benefits2	19	14	5	2	5
Carer's benefits3	13	14	14	20	14
Sickness-related benefits4	536	519	522	434	434
Invalid's Benefit	7,531	7,706	7,664	7,706	7,811
Widow's Benefit	13	16	15	10	11
Emergency Benefit	165	221	258	271	254
New Zealand Superannuation	14,361	14,119	17,941	17,701	17,799
Veteran's Pension	304	306	450	464	522
No pension or main benefit5	51	56	86	88	97
Total	22,993	22,971	26,955	26,696	26,947

Notes

1. Numbers of clients recorded in SWIFTT as having their main benefit or pension (less a personal allowance) paid to a health provider at the end of June under the Residential Support Subsidy scheme or under the Residential Care Subsidy scheme.
2. Comprises Unemployment Benefits and Unemployment Benefits - Hardship paid to unemployed people and to trainees, and Independent Youth Benefits.
3. Comprises Domestic Purposes Benefits - Sole Parent, Domestic Purposes Benefits - Care of Sick or Infirm, Domestic Purposes Benefits - Women Alone and Emergency Maintenance Allowances.
4. Comprises Sickness Benefits and Sickness Benefits - Hardship.
5. Includes clients receiving an Orphan's Benefit or an Unsupported Child's Benefit.

Table 4.27 Trends in the ages of Work and Income clients with a Residential Care Subsidy or a Residential Support Subsidy

Age of client at the end of June	Work and Income clients with a Residential Care Subsidy or a Residential Support Subsidy1
	2004 Number	2005 Number	2006 Number	2007 Number	2008 Number
Under 18 years	58	70	79	62	66
18-19 years	120	142	155	161	164
20-24 years	561	583	550	516	526
25-29 years	676	656	640	628	630
30-34 years	959	887	863	763	730
35-39 years	1,029	1,050	992	992	998
40-44 years	1,175	1,175	1,132	1,084	1,055
45-49 years	962	1,036	1,118	1,167	1,173
50-54 years	872	929	932	963	1,006
55-59 years	800	815	835	889	910
60-64 years	698	730	753	787	845
65-69 years	906	926	991	1,038	1,050
70-74 years	1,483	1,461	1,564	1,505	1,538
75-79 years	2,392	2,297	2,685	2,593	2,601
80 years or over	10,302	10,214	13,666	13,548	13,655
Total	22,993	22,971	26,955	26,696	26,947

Note

1. Numbers of clients recorded in SWIFTT as having their main benefit or pension (less a personal allowance) paid to a health provider at the end of June under the Residential Support Subsidy scheme or under the Residential Care Subsidy scheme.

---

Trends in the proportion of people aged 65 years or over who are Work and Income clients with a Residential Care Subsidy paid towards the cost of their care

The proportion of all people aged 65 years or over in the New Zealand population who were Work and Income clients with a Residential Care Subsidy at the end of June showed little change in the last two years, after increasing significantly between 2005 and 2006 (see figure 4.13). This increase reflected the increased asset threshold for eligibility for these subsidies, and is particularly evident among people aged 80 years or over (reflecting the dominance of this age group among users of these subsidies).Throughout this period, the proportion of people in each age group who are Work and Income clients with a subsidy has increased with the increasing age of the clients, reflecting the health and medical impacts of ageing.

figure 4.13 Trends in the proportion of people aged 65 years or over who are Work and Income clients with a Residential Care Subsidy paid towards the cost of their care, by age

Note

1. Proportion shows:
   1. number of Work and Income clients in age group recorded in SWIFTT as having their main benefit or pension (less a personal allowance) paid to a health provider at the end of June under the Residential Support Subsidy scheme or under the Residential Care Subsidy scheme, divided by
   2. Statistics New Zealand final estimate of the resident population in age group at the end of June.

See table A3.20 for a summary of the SWIFTT data underlying figure 4.13

---

Trends in Work and Income clients who are found to be financially eligible for Residential Care Subsidies or take up Residential Support Subsidies

Please note that successful applications to Work and Income for:

• Residential Care Subsidies indicate that the Work and Income assessment showed that clients are financially eligible for a subsidy
• Residential Support Subsidies indicate that a Work and Income client took up a Residential Support Subsidy.

These statistics don't necessarily indicate the number of Work and Income clients who were assessed by District Health Boards as needing long-term or lifetime care in the year shown, or who began to use a subsidy in the year shown.
The annual number of Work and Income clients found to be financially eligible for Residential Care Subsidies or taking up Residential Support Subsidies increased in the last year, after decreasing the year before (see table 4.28).

Between 2006/2007 and 2007/2008, the proportion of these clients who were receiving New Zealand Superannuation decreased from 60% to 53%, with a corresponding rise in the proportion receiving Invalid's Benefit (from 20% to 29%) (see table 4.28).

Table 4.28 Trends in the types of pension or main benefit paid to Work and Income clients found to be financially eligible for a Residential Care Subsidy or taking up a Residential Support Subsidy

Type of pension or main benefit paid when financial eligibility for Residential Care Subsidy is established or Residential Support Subsidy is taken up	Number of successful applications for Residential Care Subsidies and Residential Support Subsidies1
	2003/2004 Number	2004/2005 Number	2005/2006 Number	2006/2007 Number	2007/2008 Number
Unemployment-related benefits2	33	28	16	10	18
Carer's benefits3	81	99	103	90	97
Sickness-related benefits4	1,751	1,482	1,430	1,559	1,773
Invalid's Benefit	1,703	1,885	1,665	1,967	3,603
Widow's Benefit	11	8	6	2	6
Transitional Retirement Benefit5	2	0	0	0	0
Emergency Benefit	92	124	119	117	85
New Zealand Superannuation	4,922	4,683	9,627	5,932	6,673
Veteran's Pension	140	150	310	238	305
No pension or main benefit6	23	32	60	50	52
Total	8,758	8,491	13,336	9,965	12,612

Notes

1. Number of successful applications for Residential Care Subsidies or Residential Support Subsidies recorded in SWIFTT during years ended June. A successful application indicates that the client has been found to be financially eligible for a Residential Care Subsidy or has taken up a Residential Support Subsidy.
2. Comprises Unemployment Benefits and Unemployment Benefits - Hardship paid to unemployed people or to trainees, and Independent Youth Benefits.
3. Comprises Domestic Purposes Benefits - Sole Parent, Domestic Purposes Benefits - Care of Sick or Infirm, Domestic Purposes Benefits - Women Alone and Emergency Maintenance Allowances.
4. Comprises Sickness Benefits and Sickness Benefits - Hardship.
5. The phasing-out of this benefit was completed on 1 April 2004.
6. Includes clients receiving an Orphan's Benefit or an Unsupported Child's Benefit.

---