Residential Care Subsidy historic review refunds

Some clients will have a historic review of their financial means assessment for Residential Care Subsidy and may get a lump sum refund.

These refunds are exempt from means testing for a period of 12 months from the date the payment is made.

A decision clarifying how the Ministry of Social Development can exercise discretion for including deprivation in financial means assessments for Residential Care Subsidy was made by the Court of Appeal on 31 May 2019.

Clients (or their estates) can request a historic review of their financial means assessment to make sure the Ministry applied discretion in relation to deprivation correctly.

The historic review may find that a client's previous financial means assessment was incorrect, and they were assessed to pay too much towards the cost of their residential care.

These clients may get a lump sum refund of Residential Care Subsidy and/or other payments they, or their partner, were entitled to.

Residential Care Subsidy refunds due to historic reviews may include any or all of the following:

• Residential Care Subsidy
• a benefit, eg Emergency Benefit
• extra help, eg Special Disability Allowance, Disability Allowance and Clothing Allowance

Residential Care Subsidy refunds due to historic reviews are not treated as income or cash assets for the first 12 months after the payment is made, on or after 11 June 2021.

This exemption only applies to the client whose financial means assessment is being reviewed, and their partner (if any).

If both the client and their partner have died, and a refund of Residential Care Subsidy due to a historic review is made to their estate or another family member, then this exemption does not apply.

Note Residential Care Subsidy refunds not made as part of a historic review are not exempt from means testing.

At the end of the first 12 months after the refund is made, any remaining amount a client has is treated as a cash asset for the client and their partner (if any).

Any income earned from the cash asset is also treated as income after the first 12 months, and a review of income may be initiated.