Rest-home subsidies change draws fire

Photo / ThinkStock

The Government's tightening of restrictions on rest home subsidies will cause resentment among the elderly, a lobby group says.

"And it will bring a lot of unfairness back into it," Grey Power president Roy Reid said yesterday.

In a little-signalled move, the Government is switching to inflation-indexing of the maximum assets people can own and receive taxpayer subsidies for aged residential care.

The previous Labour administration dramatically increased the limit in 2005, and began $10,000 annual increases that were to continue until 2025/26.

This year's limits are $210,000 for a single person or couple in care. Couples with one partner in care can opt to choose a limit of $115,000, excluding the value of a house and car.

Based on assumed inflation of 1.57 per cent, the limits will now rise on July 1 by much less than under Labour's scheme, to $213,297 and $116,806.

The Health Ministry calculates the switch will save Government $4.5 million in the coming financial year.

Contract prices with district health boards vary nationally but on average are $818 including GST a week for rest home residents, and much more for those in dementia units and residential care hospitals.

Labour accused the Government of trying to sneak the change through. Its Aged Care spokesman Kris Faafoi said although Social Development Minister Paula Bennett described the change as "a priority" it was not mentioned in Finance Minister Bill English's lengthy Budget speech and was only a small sentence in Health Minister Tony Ryall's Budget press release.

NZ First MP Barbara Stewart said it was an "ambush" and a "piece of tacky legislation"..

The Aged Care Association, representing rest home owners, supports the change. Chief executive Martin Taylor said it was a small step in addressing a big issue: how to pay for care for an ageing population.

Mr Ryall said the Government was spending about $100 million extra over the next four years on aged care services.