There’s a lot to get your head around when it comes to how much of your care home fees you have to pay yourself and for how long. The rules and regulations governing this include means assessments and asset tests.
You are responsible for paying for, or contributing towards, your residential care. If you are unable to pay the full amount for your care, a set of rules and regulations governs what financial assistance you might be eligible for.
Residential Care Subsidy
The Residential Care Subsidy (RCS) can contribute towards the cost of standard services for those who qualify after a needs assessment and assets and income assessment has been completed. Depending on your assets and income, this could cover the full cost of care or only be a partial contribution (you would have to pay the remainder). To be eligible, you must be a qualifying person or a special case.
You are a qualifying person if:
- You are aged 65 or over and;
- You are eligible for publicly funded health and disability services and;
- You have been assessed as requiring long-term residential care and;
- You are entitled to apply for a Financial Means Assessment.
An example of a non-qualifying person is someone without New Zealand residency. If this is the case, the person may negotiate the cost of care with the provider and pay privately.
You must return the signed RCS application to Work and Income within 90 days of the date you want payment to start.
Asset Testing
If you are a qualifying person, a means assessment of assets is the next step in determining whether you are eligible for an RCS. There is a dollar amount of assets you can keep that you are not required to contribute towards your care. This is called the Asset Threshold. Each year on 1 July the threshold is adjusted in line with the Consumer Price Index.
The current thresholds (as at July 2025)
If you are single, you're eligible if you have assets equal to or below $291,825.
For a couple in long-term care, you're eligible if you have combined assets equal to or below $291,825.
For a couple with one in care there are two threshold options:
- Combined assets of $159,810, not including the value of your home and car, or;
- Combined assets of $291,825, which does include the value of your home and car.
If your assets are above the asset threshold and you have been assessed as requiring residential care, you will have to pay privately for this. As your assets decrease you may become eligible for an RCS: make sure you, or someone you trust, monitors when this is approaching so that you can apply. If your assets are found to be equal to or below the asset threshold and you meet other criteria, you may be eligible for an RCS. You will still need to have an income assessment, which includes NZ Super.
You'll likely want to retain as much of your asset base as possible. The following examples help illustrate the differences:
Couple A may choose the higher threshold of $291,825. They do not own their own home and have total assets of $185,000 so are under the Asset Threshold.
Couple B may choose the lower threshold of $159,810. They own their own home (it’s worth noting that retirement village units and serviced apartments will be treated as a home for RCS purposes) worth $700,000 and a car worth $18,000. The car is exempt from the assessment. The house is exempt only when it’s the main place where the partner who is not in care or a dependent child lives.
Special cases
You are a special case person if you are:
- Aged 50 to 64, single, and have no dependent children, or;
- An exempt person, or;
- An 'elderly victim of crime'.
The rules differ to those for a qualifying person. For example, if you are aged 50 to 64, single and have no dependent children, your income will be means tested, not your assets. Contact Work and Income for more details.
Income Testing
Income testing can be rigorous. Although as a qualifying or special case person you may be eligible for an RCS, you must still contribute towards the cost of your care from income. The income assessment determines the amount. This is between you and Work and Income, not you and the care home.
Residential Care Loan
If owning your former home puts you over the asset threshold and you other assets are under it, you may be able to get a Residential Care Loan (RCL) to cover your fees. Applications are considered case by case, are discretionary, and must fit the scheme's criteria. You will need to pay privately for your care while this is processed and cover any associated costs, such as lawyer's fees.
If approved, you will need to sign a Residential Care Loan Agreement. The loan will be secured over your former home by lodging a caveat against its title. If your former home is a unit in a retirement village and your 'title' is a Licence to Occupy, the loan will be secured against the termination proceeds due to you. You will need to assign your interests in the termination proceeds to the Crown, and this will be recorded in the loan agreement. The operator of your village will also need to agree to this arrangement.
The loan is generally repayable within 12 months of your death, or when your home is sold, whichever happens first.
Payments under the loan stop when an RCS is approved. Application forms are included in the RCS application document, or contact Work and Income on 0800 999 727.
Key Points
- If you receive an RCS, you will keep a personal allowance of $56.58 a week and a clothing allowance of $354.89 a year (as at 1 July 2025) from your NZ Super.
- If you are eligible for an RCS and have a partner living at home, they may be eligible for a weekly Special Disability Allowance of $50.11 (as at 1 July 2025). They may also be eligible for NZ Super at the Living Alone rate.
- Private payers may be eligible for Work and Income assistance if they meet criteria. Subsidised residents are not eligible for a Disability Allowance as this is factored into the RCS.
- You can ask for a review of your means assessment or for a financial means assessment at any time.
For more about this subject see this information on the government health website.
Note: Details may change, individual circumstances vary widely, and some situations can be complex. Please therefore ensure that you get the appropriate advice from Work and Income. You can phone the Residential Care Subsidy Unit freephone 0800 999 727.
If you are looking for residential care vacancies look on Eldernet Residential Care - the aged residential care beds are updated DAILY.
Updated: 5 Dec 2025