Key Takeaways
- New Zealand’s pension scheme has conditions on travelling, including a 26-week limit before pension payments are stopped, unless provisions are made with Work and Income.
- KiwiSaver accounts can only be withdrawn from in limited circumstances, such as financial hardship, buying a first home, or leaving the country permanently.
- The government’s rest home subsidy asset test threshold is $284,636, and assets below this threshold will not affect the subsidy for care.
- When assessing a person’s ability to pay for care, the government will usually take into account the income and assets of their partner.
- People can qualify for a residential care subsidy if they meet the income and means test, and their combined income and assets with their partner are under a certain amount.
Introduction to New Zealand’s Pension Scheme
New Zealand’s pension scheme has been a topic of discussion, particularly with regards to travelling. A listener asked about the conditions on travelling, given that they plan to visit their daughter in Canada and potentially use her as a base to go sightseeing. The Ministry of Social Development explained that the scheme’s eligibility is based on residence in New Zealand, and that people who want to travel can receive their pension for 26 weeks if they return to New Zealand within 30 weeks. This rule is in place to keep the scheme fiscally sustainable.
KiwiSaver Accounts and Withdrawal Circumstances
Another listener asked about withdrawing from their KiwiSaver account, given that they are no longer working due to osteoarthritis. Unfortunately, KiwiSaver accounts can only be withdrawn from in limited circumstances, such as financial hardship, buying a first home, or leaving the country permanently. The listener’s situation does not meet the criteria for financial hardship, and they will have to wait until they are 65 to access their KiwiSaver funds. The founder of KiwiSaver provider Koura, Rupert Carlyon, explained that the KiwiSaver Act defines serious illness as something that results in the member being totally and permanently unable to engage in work, and that the listener may not qualify for this category.
Rest Home Subsidy Asset Test Threshold
A listener asked about the rest home subsidy asset test threshold, given that their parents own a unit in a retirement village and have joint savings of $50,000. The government’s rest home subsidy asset test threshold is $284,636, and assets below this threshold will not affect the subsidy for care. In this case, the listener’s parents’ assets are below the threshold, and the inheritance from the sale of the unit will not be used to fund the father’s care.
Assessing Ability to Pay for Care
Another listener asked about the government’s requirements for paying for care, given that their partner needs permanent medical care. The Ministry of Social Development explained that when assessing a person’s ability to pay for care, the government will usually take into account the income and assets of their partner. This means that even if the partner’s funds have run out, the listener’s assets could still be taken into account. The government’s role is to check whether people qualify for the residential care subsidy by performing a financial means assessment, and people can qualify for the subsidy if they meet the income and means test.
Conclusion
In conclusion, New Zealand’s pension scheme and KiwiSaver accounts have specific rules and regulations that affect how people can access their funds. The government’s rest home subsidy asset test threshold and assessment of ability to pay for care also have significant implications for people who need care. It is essential to understand these rules and regulations to make informed decisions about retirement and care. By signing up for Money with Susan Edmunds, a weekly newsletter covering all the things that affect how we make, spend and invest money, readers can stay up-to-date on the latest information and advice on managing their finances.