When elderly New Zealanders apply for residential care subsidies, the Ministry of Social Development’s initial letter of response often includes reference to “a Court decision” that “clarified what may be considered asset deprivation”.
The Ministry never identifies the case, but it is probably the case of the Chief Executive of the Ministry of Social Development vs Broadbent [2019] NZCA 201.
It is true that the Broadbent case clarified what may be considered asset deprivation – particularly where family trusts are concerned. But while the Ministry’s mention of the case in its letters suggests that this clarification benefited the Ministry, in fact precisely the opposite is true.
What Broadbent clarified was this:
The Ministry cannot simply gross up the value of the assets of a Family Trust…
… calculate a notional income from that value…
… and then assess your application for a residential care subsidy, as if that notional income was your actual income. Also
The Ministry cannot ignore the fact that you have validly forgiven debts owed to you by your Family Trust…
…in order to adopt a notional and constant interest rate on that debt…
…and then assess your application as if that notional income was your actual income.
In short, when assessing your application for a residential care subsidy, the Ministry of Social Development is required to make calculations that are accurate and precise. We can help you to make sure that it does.
If you would like to discuss a residential care subsidy application give us a call (03) 477 8080