Planning ahead for the cost of care in later life is one of the most important steps you can take, yet it is something many of us put off until a crisis forces our hand. It is entirely natural to avoid thinking about a time when we or our partners might lose our independence, as these conversations can feel emotionally heavy and difficult to start. However, if you or a loved one ever needs to move into a rest home or other residential care facility, the fees can be significant, adding an extra layer of anxiety to an already challenging family transition. If you are unable to meet those costs yourself, you may be eligible for a Residential Care Subsidy, which is a government payment that helps fund long-term residential care for eligible New Zealanders.
Whether you qualify for the subsidy depends on your age, your relationship status, and the total value of your assets. From 1 July 2026, the asset limits for people aged 65 and over are $300,811 if the full value of everything you own is counted, or alternatively $164,731 if your family home and car are excluded from the calculation. These asset limits are reviewed annually, and the lower limit typically applies when you are part of a couple and one partner moves into higher-level care while the other remains living in the family home. For those who reside in a retirement village, the value of your Occupation Right Agreement takes the place of the family home in this assessment.
Another factor that can cause unexpected worry is gifting. Any gifts you make in the five years before applying for the subsidy can affect your eligibility. The permitted gifting limit is $8,500 per year (or up to $42,500 over five years). While helping out children or grandchildren is a natural instinct, gifts above that amount may be counted as assets when your means are assessed. This could unexpectedly reduce or even eliminate your entitlement to the subsidy, turning a generous gesture into a stressful financial hurdle.
Because these rules are complex and ever-changing, getting them wrong can cause significant distress. Every family’s situation is unique, and what applies to one family may not apply to another. Trying to decode government policies during a stressful time can feel overwhelming, and this is where seeking legal advice early can offer relief. A lawyer can act as a reassuring guide, translating complex legal jargon into clear steps and helping you understand exactly how the rules apply to your circumstances. Planning ahead with professional support takes the burden off your shoulders, ensures you receive every bit of support you are entitled to, and brings genuine peace of mind to your family.
How can we help?
If you need advice on retirement living, WRMK Lawyers’ experienced team of experienced local life planning lawyers are happy to help.
Our thanks to Amber Pemberton for writing this article. Amber is a Senior Lawyer in the WRMK Lawyers Warkworth team.
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