13 AUGUST 2009 NEW ZEALAND GAZETTE, No. 119 2729

13.17 The “amount of loan balance repayable” is, subject to paragraph 13.11 and 13.15, the amount, not exceeding the amount of the loan balance then owing, calculated by deducting the client’s protected equity from the sale proceeds of the former home.

13.18 Where the client holds or held the former home jointly or as a tenant in common with some other person or persons, the client’s protected equity is calculated by deducting from Amount X the total amount of assets (other than the former home) that the client was assessed as having in:

(a) the means assessment immediately preceding the loan application, if the client has never qualified for a subsidy; or

(b) in any other case, the means assessment that determined that the client was eligible for a subsidy.

13.19 In paragraph 13.18, “Amount X” is the relevant asset threshold multiplied by the fraction that represents or represented the client’s ownership in the former home (for example, if the client and other owner are or were the only joint tenants or tenants in common in equal shares, the fraction is 0.5 or ½).

13.20 In all other cases, the client’s protected equity is calculated by deducting from the relevant asset threshold the total amount of assets (other than the former home) that the client was assessed as having in:

(a) the means assessment immediately preceding the loan application, if the client has never qualified for a subsidy; or

(b) in any other case, the means assessment that determined that the client was eligible for a subsidy.

13.21 For the purposes of paragraphs 13.19 to 13.20, “relevant asset threshold” is the applicable asset threshold at the termination event.

Write-off of a loan

14. The Ministry of Social Development may remit all or any part of the loan balance that exceeds the value of the client’s ownership in the former home less the value of the client’s protected equity, if (in the opinion of the Director-General of Health) the circumstances of the client or any person resident in the former home are exceptional.

15. The Ministry of Social Development may allow any of the following amounts to be deducted from the sale proceeds before the loan is repaid:

(a) reasonable and necessary legal fees and disbursements on the sale of the former home (other than the cost of registration of the withdrawal of the caveat lodged in respect of the loan):

(b) real estate agent’s fees payable on the sale of the former home, up to a maximum of 5% of the value of the sale proceeds:

(c) if the client has died and had not previously purchased a pre-paid funeral, funeral expenses up to a maximum of $10,000.00:

(d) if the client has not died and has not previously purchased a pre-paid funeral, funds used for this purpose up to a maximum of $10,000.00:

(e) the value of any gift in recognition of care within the meaning and that meets the criteria specified in regulations made under section 155 of the Act.

16. After the client’s protected equity and any amounts allowed under paragraph 15 have been deducted from the sale proceeds, the Ministry of Social Development may accept the remainder of the sale proceeds in full and final settlement of the amounts due and owing under the loan.

Deferment of loan repayment

17. The Ministry of Social Development may from time to time defer repayment of a loan balance for a specified period if any person living in the client’s former home meets all of the following criteria:

(a) he or she was living in the former home immediately before the client entered long-term residential care, and had lived there on a continuous full-time basis for at least 5 years before the client entered long-term residential care; and

(b) he or she continued to live in the former home while the client was in long-term residential care and remained living there after the client’s death; and

(c) he or she has inherited the former home from the client or taken it by survivorship, or inherited from the client an estate or interest in the former home jointly or in common with some other person, or has been left a life interest in the former home by the client, and has a legal right to live there.

18. Deferment of the loan repayment is only available in respect of the first person who meets the above criteria, and only applies while that person remains living in the client’s former home. If the former home is sold or otherwise disposed of or the person moves out (other than temporarily), the loan balance becomes immediately repayable.

19. There is no obligation on the Ministry of Social Development or the Ministry of Health to agree to defer repayment of a loan or to agree to continue any deferment previously agreed.

20. A deferment under paragraph 17 may be given on conditions, including conditions relating to review and cancellation if for a period longer than 2 years.

Changes to loan scheme

21. The loan scheme policy will be reviewed and updated periodically. Any changes to the eligibility criteria will be gazetted.

Copies of notice

22. Copies of this notice can be found on the Ministry of Health website at http://www.moh.govt.nz/assettesting

Dated at Wellington this 10th day of August 2009.

STEPHEN MCKERNAN, Director-General of Health.