Commentators and advisers have been divided regarding whether or not gifts made by couples are aggregated for residential care subsidy purposes. A decision by the High Court that gifts are aggregated, has now been up-held by the Court of Appeal. So what does this mean? Simply, for a person with a spouse or partner, gifts made by the spouse or partner will be taken into consideration when determing entitlement to a residential care subsidy. Accordingly, the permissible limits of:
- $27,000 per annum outside the five year gifting period
- $6,000 per annum for the five year gifting period
will be limited to the gifts made by the applicant, and will include gifts made by the applicant’s spouse or partner. For example if both Trudy and Rick gift $27,000 a year, that is $54,000 between them, if the limit is $27,000 and Trudy goes into care, although her gift of $27,000 will be allowed, the gift made by Rick will not and will be included in the calculation of Trudy’s means.
A practical response may be to limit annual gifting to $13,500. However, note that for the last five years prior to going into care, the annual limit is $6,000, and so for this period a cautious response would be to limit gifting to $3,000.
That said, an element of crystal ball gazing is required because if both partners/spouses go into care, then the permissible amount of gifing is $27,000 or $6,000 each as relevant.
- B v The Chief Executive of the Ministry of Soclal Deveopment  NZCA 410
- B v The Chief Executive of the Ministry of Social Development  NZHC 3165