"A week later eight residents were found with scabies," said the caregiver, who suffered a flare-up or possibly a second infestation a week after having the first one treated.
Waratah manager Mary Atkins told the Herald this month that scabies had been eradicated at the home with the DHB's help, but she would not say when, or how many people had been affected.
The tiny scabies parasite burrows into the skin surface and can cause a crusty scale or itchy rash. Scabies mites are usually transmitted between people by skin contact, such as holding hands, and sometimes through bedding or furnishings.
Infestations can be treated by oral tablets and insecticidal skin creams. Affected bedding and clothing is recommended to be washed in hot water and dried in a hot clothes drier - or frozen below -20C for 12 hours.
The Dermatological Society says treatment of scabies outbreaks in rest homes and other residential facilities must be planned carefully. "Treatment failures are common when it is not co-ordinated or carried out appropriately."
In a September letter to the complainant, after an investigation, DHB funding director Debbie Holdsworth said: "An outbreak of scabies in January 2013 was inadequately managed, resulting in scabies being present in the facility for nine months. Policy, procedure and guidelines sighted in the infection control manual were insufficient to provide guidance on containment and outbreak management. Although staff had sought the advice of a dermatologist this advice was not carried out."
The board urged the rest home to work with DHB nurses on the "urgent clinical containment and management" of the outbreak.
Mrs Atkins said: "It is always extremely difficult to diagnose scabies because it mimics so many common skin irritations in the elderly. Once we suspected scabies we promptly treated it case by case. This proved unsuccessful. It then became clear we needed to treat the whole home, which was successful.
"... we've been in existence for 20 years and we've had high occupancy all that time and we enjoy a really good name ... most of our residents are very happy with our care and that's why we stay full, because it's word of mouth."
The caregiver also expressed concerns about incontinence-management instructions given at the home, but Mrs Atkins rejected these comments and Dr Holdsworth said they were not substantiated.
Dr Holdsworth told the Herald she was happy with Waratah's response following the DHB's intervention.
Are you or someone in your family thinking about moving into a rest-home? The Herald has compiled this guide for you to consider before you make your choice.