The Residential Care Subsidy: who qualifies and how to apply

What the subsidy is

If you need to live in a rest home or hospital long term, the Residential Care Subsidy may pay for some of your care. How much it pays depends on your assets and income, and your partner's if you have one. When it is approved, Work and Income pays the subsidy directly to the care home.

The subsidy is for long-term care. Work and Income has separate phone lines for long-term care and for rehabilitation, mental health or disability care. The numbers are at the end of the "How to apply" section below.

Who can get it

You may be able to get the subsidy if you are:

• 65 or older, or
• 50 to 64, single, and with no dependent children.

You must also have been assessed as needing long-term residential care, and be receiving contracted care services. Contracted care is the care a rest home or hospital provides under its agreement with Health New Zealand (Te Whatu Ora).

The asset test

Work and Income adds up what you own and compares it with a limit. These are the limits shown on Work and Income's page when we checked on 15 October 2026:

If your partner still lives at home, you can choose which of the last two rows applies to you. Leaving the home and car out means a lower limit for everything else you own.

The page was updated on 4 August 2026, but it does not say which financial year these figures belong to. Confirm the current limits with Work and Income before you make any decisions based on them.

The income test

Work and Income also checks that your income is below its limits. There is no single dollar figure to compare against. Each type of income, such as NZ Super, private superannuation, overseas pensions and earnings, is worked out in its own way. Ask Work and Income how your income will be treated and what you will pay towards your care.

Gifts you have made

Work and Income looks back at what you have given away. It will not count:

• up to $8,500 a year of gifts made in the 5 years before you apply, up to a total of $42,500. This total covers gifts by you and your partner, even if your partner has died.
• up to $27,000 a year of gifts made more than 5 years before you apply.

There is also an allowance for gifts to someone who has cared for you. If you received a high level of care from them for at least 12 continuous months in the last 5 years, those gifts may not be counted. But gifts in recognition of care cannot be more than $42,500 when combined with your other allowable gifting in the last 5 years.

Gifts above these allowances can affect your assessment. If you are thinking of giving money or property to family, get legal advice first.

If most of your money is in your home

The Residential Care Loan is for people who still own the home they lived in before going into care, and whose assets, including the home, are over $300,811. To qualify, your other assets must be under $15,000 if you are single, or under $30,000 if you have a partner.

The loan is interest-free and is paid directly to the rest home. It is usually repaid when the home is sold or when you die, whichever happens first. If it is not repaid within 12 months of your death, interest may be charged at 10% a year. Applications take 6 to 8 weeks to process. Our guide to selling the family home has more detail.

How to apply

1. Book a needs assessment. The process starts with a Needs Assessment Service Coordination (NASC) agency, not with Work and Income. NASC agencies are funded by Health New Zealand to work out what care people need. See our guide to needs assessments.
2. Complete the financial means assessment form from Work and Income.
3. Work and Income assesses you. It looks at your assets, reviews any assets you have gifted or sold, and assesses your income.
4. The subsidy starts. If you qualify, Work and Income sets a start date and pays the care home directly.

Call the Residential Subsidy Unit on 0800 999 727 for long-term care, or 0800 999 779 for rehabilitation, mental health or disability care.

Questions to ask

Ask Work and Income:

• Which year do the asset limits you have quoted apply to?
• How will each type of my income be treated, and how much will I pay each week?
• Will any gifts I have made be counted?
• My partner is staying at home. Should we count the house and car, or leave them out?
• When will my subsidy start, and what do I pay until then?

Ask the care home:

• Do you provide contracted care, and do you have a vacancy at my assessed level?
• What will I be charged for on top of my contracted care?