NEW ZEALAND GAZETTE, No. 119

13 AUGUST 2009

Social Security Act 1964

Notice of Eligibility for Loans Under the Residential Care Loan Scheme (Effective On and After 15 August 2009)

Pursuant to section 153 of the Social Security Act 1964, the Director-General of Health gives notice of the following eligibility criteria for loans under the Residential Care Loan Scheme (“loan scheme”) operated by the Ministry of Health which are effective on and after 15 August 2009.

Details of the loan scheme policy are set out below.

Interpretation

1. In this notice:

   • “Act” means the Social Security Act 1964
   • “amount of loan balance repayable” has the meaning in paragraph 13.17
   • “applicant” has the meaning in paragraph 3 or 4
   • “civil union” has the meaning in the Civil Union Act 2004
   • “client” has the meaning in paragraph 5
   • “Crown” means the Sovereign in right of New Zealand acting by and through the Director-General of Health
   • “de facto relationship” has the meaning in section 29A of the Interpretation Act 1999
   • “former home”, in relation to a person, means the residential dwelling that was the person’s principal place of residence immediately prior to the person entering long-term residential care
   • “key eligibility criteria” has the meaning in paragraph 3
   • “loan” means a residential care loan
   • “loan agreement” means an agreement made between the Crown and a borrower in respect of a loan
   • “loan balance” means the amount for the time being advanced by the Crown under a loan agreement including any default interest or other amount added to or deducted from it
   • “own” or “owns”, in relation to a former home, means having an estate or interest in that home (or in the case of a licence to occupy, a right to be paid or repaid money on the termination of that licence); and “owned”, “owner”, and “ownership” have corresponding meanings
   • “means assessment” means a means assessment as to assets under section 146 of the Act
   • “period of the loan” has the meaning in paragraph 13.2(a)
   • “principal sum”, in relation to a mortgage or charge referred to in the definition of sale proceeds, means the amount secured by that mortgage or charge at the time the loan agreement was entered into
   • “protected equity” means the amount of sale proceeds that a client is entitled to retain before all or any part of the loan balance is repaid, calculated as set out in paragraphs 13.18 to 13.20
   • “relevant asset threshold” has the meaning in paragraph 13.21
   • “resident assessed as requiring care” means an eligible person who:
     • (a) has been needs assessed as requiring long-term residential care in a hospital or rest home indefinitely; and
     • (b) is receiving contracted care services from a provider irrespective of whether a funder has any liability to pay for any of the cost of his or her care
   • “sale proceeds”, in relation to a client’s former home, means:
     • (a) the price that home was sold for after the deduction of the amount of the principal sum owing at the date of settlement of the sale under any mortgage or charge over the former home identified in the means assessment immediately preceding the loan application that the Ministry of Social Development accepts as having priority over the loan; or
     • (b) in the case of a licence to occupy, the amount paid or repaid on its termination
   • “subsidy” means a funder’s liability under Part 4 of the Act in respect of a resident assessed as requiring care who has been means assessed and found to have assets equal to or below the applicable asset threshold
   • “termination event” has the meaning in paragraph 13.7.

2. All other terms used in this notice have the same meanings as in section 3(1) or Part 4 and Schedule 27 of the Act.

Eligibility criteria

3. A person (“applicant”) may apply for a loan if the applicant meets all of the following criteria (“key eligibility criteria”):

   • (a) the applicant is a resident assessed as requiring care:
   • (b) the applicant has been means assessed as to assets under Part 2 of Schedule 27 of the Act and been found to have assets above the applicable asset threshold:
   • (c) the applicant is liable to pay for the cost of contracted care services provided to him or her:
   • (d) the applicant’s assets are above the applicable asset threshold only because he or she owns a former home and the applicant does not qualify for a subsidy because the value of the client’s ownership of the former home means that the applicant has assets above the applicable asset threshold:
   • (e) the applicant’s assets other than his or her ownership of the former home must amount to no more than $15,000.00 for a single person and $30,000.00 for an applicant who is married, in a civil union, or in a de facto relationship.

4. A person (“applicant”) who meets at least paragraphs (a) to (c) but not all of the key eligibility criteria may apply for a loan in exceptional circumstances demonstrated to the satisfaction of the Ministry of Social Development.