Rest home-level care is increasingly unaffordable for ageing NZers, yet with the numbers in need set to soar, the sums don’t add up for providing more beds. In Part I, Erik Frykberg talked to those on the frontlines of the aged care crisis. Here, he sums up who should pay.
Applicants for state-subsidised residential care go through a means assessment process that includes asset testing. The government covers a portion of the care costs, paid directly to the facility, and you pay the balance.
At present, the cut-off threshold for qualifying for the subsidy is assets of more than $284,636 including your home, or $155,873 excluding your home if your partner or dependent child lives there. Income, including NZ Super, is also included in a calculation that determines the amount the state pays to the facility.
With funding arrangements for the sector under review, there are fears thresholds could be lowered to put more of the costs on to the individual. If, say, half of the current 32,000 people in long-term residential care had their asset threshold halved, it would save the state about $2.2 billion.
Means testing is already widely resented by those who maintain healthcare should be covered by the taxpayer. The Aged Care Association agrees, and says the health cost should be isolated from costs such as accommodation, food and utilities and charged to Te Whatu Ora, with only the individual’s ability to cover non-health related costs subject to means testing.
The rationale behind this argument is that people pay taxes for the health service throughout their lives, so their health needs should be met into old age from the public purse.
But they pay for their own home themselves throughout their life – they do not ask the government to find the money. So, that pattern should perhaps continue into old age.
In other words, making people pay for their accommodation in old age but getting healthcare from the taxpayer would continue a well-established pattern.
Association chief executive Tracey Martin says separating out the costs would give greater transparency. “New Zealanders understand that if they were at home they would have to pay their rates, their power bill … we should give them transparency so they can see where their superannuation is going. Then, the Ministry of Social Development should be part of the conversation, because that senior could be getting an accommodation supplement. By splitting it up, we could look at where all the costs are, and we could manage that.”
Asset testing might mean the costs of accommodation for some reduce to zero.
