Taking stock when it's time to move on

The best piece of advice for when the time has come to leave the family home for social, location or health reasons is "don't panic".

Panic can make you freeze, which is very counter-productive because there's one thing that doesn't freeze - the ageing process.

Harden up if you are thinking you should stay put to preserve an inheritance for your children and grandchildren - by and large they are far bigger earners than you ever were and probably accustomed to a level of daily comfort and convenience that you had to wait decades to experience.

Ideally, it's best to bite the bullet and create the best possible scenario for yourself. Deteriorating health is likely to force a decision, at which point the how and where of what happens are likely to be out of your hands. All stating the obvious you might say - but anyone involved in senior living options and requirements will tell you they hear every day of people who refused to make the hard decisions until they faced a health catastrophe.

A simple overview of a complex subject

Staying put: This is an option if your home is suitable for when you are less mobile and less well with services available to enable you to stay living in your home, following a needs assessment. These are government-funded, asset-tested and supplied by community health service providers. The assets are anything that can be readily converted into cash, including stocks and shares and money in the bank. It does not include the value of the client/clients' house or the land it stands on, their car or personal effects.

Had enough: If you want to quit the house and garden, like company and are still fit and healthy, the lifestyle village could be for you - if you have the money to buy your accommodation.

An example is The Falls Estate in Whangarei, where residents range in age from 58 to 92. Many of them are active in the community. Manager Graham Tiplady says while aspiring residents have to be able to pay for their accommodation, there is some flexibility in the system if they haven't got quite enough. Say, where someone can only come up with $250,000 for a $300,000 townhouse.

"We can carry that as a deferred, interest-free loan which is repaid when the property is sold," he says. "We do it because we can. We want to make the properties affordable."

The not-for-profit Anglican Selwyn Foundation will advance an 80-90 per cent loan, for a year at nominal interest, to individuals or a couple who haven't yet found a buyer for their home but want to come in straight away. The year gives them time to accept the reality of the market, says Selwyn Foundation CFO Fred Pau. Most large villages now provide "care-unto-death", meaning residents don't have to face the heart-breaking move to strange surroundings as their health deteriorates.

The residential care subsidy: If a needs assessment shows you need long-term residential care, your needs assessor will give you the Residential Care Subsidy application forms. These are sent to Work and Income for a financial means assessment to see if you qualify for the subsidy, payable if your assets are below the defined asset threshold. Work and Income assesses your income and works out how much you need to pay towards the cost of your care. This will include most of your New Zealand Superannuation and also any other income you receive, except for a weekly personal allowance and an annual clothing grant.

You don't qualify: You must pay the cost of rest home care up to the maximum contribution for your area.

The residential care loan: If you are asset-rich (relatively) and cash-poor, you may qualify for a residential care loan, applied for through Work and Income.

The loan is secured by a caveat over a person's house and becomes payable back to the government when the person dies or the house is sold.

Choice: You have the right to choose any aged residential care provider in New Zealand with a DHB contract to provide your assessed level of care need.

Check it out: You can check a summary audit report on the rest home you may be considering on the Ministry of Health website: www.moh.govt.nz/audits.

Not happy: Even if you have moved into a residential care facility it's okay to change your mind and move to another facility. Your admission agreement will state what advance notice your current place requires.

Asset thresholds: For the year from July 1, 2010-June 30, 2011, category A, $200,000; category B, $105,000. Category A applies for a single person or a couple where both are in care. Category B applies where a couple is aged 65 and over, where only one is in long-term residential care.

There is some flexibility here. If people want their house and car to be exempted assets, they would fall into Category B. If not, they are in Category A with its higher asset threshold.

Other assets which are counted include: cash or savings, investments or shares, loans made to other people (including family trusts), boats, caravans and campervans, investment properties.

Exempt assets: A prepaid funeral of up to $10,000 is an exempt asset, likewise personal belongings including clothing, jewellery, household furniture. Information on how much of your income will be exempt, how much you can earn and treatment of family trusts can be found on www.workandincome.govt.nz, or call Work and Income Specialised Processing Services on 0800 999 727 for a copy of their booklet on the Residential Care Subsidy, or read the booklet online.

Gifting assets: If you qualify for the Residential Care Subsidy the assets you are able to retain for your use can only be gifted to others at the rate of $5500 a year.