Income

The estimated net annual income is assessed as at the date of financial means assessment. The annual income is used to determine the weekly contribution, up to the maximum contribution, that the client must pay towards the cost of their contracted care.

Always use net income. If the income is non-taxable use the amount the client gets, do not deduct an amount for tax.

Note although some forms of income are not taxed they are still considered income. Whether income is taxed or not, is irrelevant. An example is Government Superannuation, which is paid as a 'free of tax' payment but is still considered income.

The means assessment of income includes (but is not limited to):

• any income from assets of the client and partner (less the income from assets exemption)
• any benefit received by the client but not their partner (if any)
• 50% of any private pension received by the client or their partner (if any) under a superannuation scheme constituted in New Zealand or overseas
• 50% of any payments received by the client or their partner (if any) under a life insurance policy issued either in New Zealand or overseas
• any income distributed to the client or their partner (if any) from a trust or estate
• any interest or other income derived from a KiwiSaver account outside the locked-in period for the client or their partner

Note information share Child Support payments must not be included in the means assessment of income. Any Child Support a person gets must be self-declared for the purposes of Residential Care Subsidy (including any payments that may have been notified to MSD through the information share with Inland Revenue).

All Child Support payments are generally treated as non-information share Child Support payments and considered income under the general income charging rules.

For more information see:

If a client is advanced or loaned amounts by a third party (e.g. a trust or family member) it is important to check if there is a genuine expectation for the client to repay these amounts.

If the debt is not genuine the amounts are considered income and should be included in the financial means assessment.