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Feature article
Avoiding rest home fees in New Zealand
What is and isn’t allowed under the current rules
12 December 2025
AI summary
The Residential Care Subsidy helps with aged care costs but is subject to strict asset tests from the Ministry of Social Development (MSD). For those 65+, the main asset limit is $291,825.
You cannot avoid fees by gifting large sums before entering care. Anti-deprivation rules limit gifts to $8,000 per year in the last five years. Legitimate strategies include early planning and prepaying funerals.
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
| 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
