Asset testing for elderly in long-term care to be phased out

11.45am

Asset testing of elderly people in long-term care will be phased out - but not for several years, associate health minister Ruth Dyson announced today.

The Government promised before the 1999 election to remove asset testing for elderly people in long-term residential care in its first term. Then Parliament was told legislation getting rid of asset testing would be introduced by the end of last year.

Today's announcement is that it will be phased out, starting from July 1, 2005 - just months out from a possible general election.

From then, single people and couples with both partners in care will be able to keep up to $150,000 in assets, including property and savings, before they have to start contributing to the cost of their care.

Currently single elderly people in care can have only $15,000 in assets and couples $30,000 before they start contributing.

The house and car of a couple with one partner in care will continue to be exempt but their cash asset exemption will rise from by $10,000 to $55,000.

Exemption thresholds will rise by $10,000 a year until all asset testing is removed.

"It is unfair that people aged 65 and over are required to use up their assets to contribute to the cost of their care, whereas younger people are not," Ms Dyson said in a statement.

"The gradual removal of asset testing will balance these important human rights considerations against the very substantial costs involved."

The policy would cost $103 million in 2005-06 and rising to $163m in 2010-11.

About 31,000 people aged over 65 are in long-term residential care. The new policy will apply to all new admissions and to people in care who are not eligible for a residential care subsidy.

Greypower president John Jefferson welcomed the announcement but said some people would die waiting for the changes.

"I am a little disappointed, or probably more than disappointed, that it's going to take so long," he told NZPA.

"I believe that there's still a lot of elderly people out there that are going to be hurt by this."

National MP Lynda Scott said the Government was not removing asset testing, it was simply raising the threshold.

"Raising the exemption threshold by $10,000 each year after that will not remove asset testing -- it will barely keep up with inflation and appreciation of assets," she said in a statement.

"Labour has promised through two election campaigns that it would remove asset testing, and the changes to the threshold announced today won't even happen until 2005."

- NZPA