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 rest home fees but requires passing an asset test. For those 65+, the primary asset limit is $291,825.

MSD’s "anti-deprivation" rules prevent avoiding fees by gifting assets late. Gifting is limited to $27,000 per year (over 5 years ago) or $8,000 per year (within 5 years).

Legitimate strategies include early planning and keeping the family home if a partner remains. A Residential Care Loan is an option for those who don't qualify initially.

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.