A couple owned their family home outright and had a couple of small bank accounts.  They were both retired, and were concerned that if one or both of them went into a rest home their assets would be used to pay for their care.  They went to their lawyers and asked them to transfer their home to their children, thinking that this would mean the asset was no longer theirs so could not be touched.

It came as a surprise to them that this would not solve their problem, as WINZ would see this as “deprivation of assets”, and would still count the home in a means test for a rest home subsidy application.

The government (through WINZ) has a means assessment criteria in place, so if a person (or couple)’s assets are below a certain level, the government will assist in paying rest home care.

There are number of actions that will qualify as depriving yourself of assets in terms of the criteria.  They can include:

  1. Gifting more than $27,000 (between two people if the applicant has a partner) in any year before making the application.  This is relevant to any assets, not just cash. It includes transferring property to a trust or to another person, like your children;
  2. Giving an interest free loan to someone;
  3. Transferring assets into a family trust.

You should always take legal advice before making a decision about transferring your assets.