Feature article

Avoiding rest home fees in New Zealand

What is and isn’t allowed under the current rules

12 December 2025

AI summary

Understanding New Zealand's Residential Care Subsidy is key for managing aged care costs. Qualification depends on asset tests from the Ministry of Social Development (MSD), with the main 2025 threshold at $291,825.

Strict "anti-deprivation" rules prevent avoiding fees by gifting assets. Gifting is limited to $8,000 per year in the 5 years before applying. Legitimate strategies include prepaying funerals and early financial planning. If you don't qualify, a Residential Care Loan may be an option.

What you’ll learn

How the Residential Care Subsidy works

Current asset thresholds (2025)

Age 50-64

Age 65+

Age 65+ with partner staying at home

You are given two options:
	What is counted in your assets?	The maximum limit you can have
Option 1: Lower limit	Option 1: Lower limit	Everything but your family home and car.	Everything but your family home and car.	Your other assets must be $159,810 or less.	Your other assets must be $159,810 or less.
Option 2: Higher limit	Option 2: Higher limit	Everything, including the value of your family home and car.	Everything, including the value of your family home and car.	Your total assets must be $291,825 or less.	Your total assets must be $291,825 or less.

Can you avoid rest home fees by gifting assets?

Gifts made in the last five years are subject to a strict limit of $8,000 per year combined. Any excess amount is still counted toward your assets.

The limits

Fair value check

Legitimate ways to avoid rest home fees

Strategies that do not work

If you don’t qualify straight away

Don’t expect loopholes

Author

Hannah Hilliam

Content Writer

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