Income from assets

Income from assets may include (but is not limited to) income from:

• a business
• Maori land
• rental properties
• investments
• shares
• personal loans
• royalties
• company or partnership
• a life interest (eg rental income from family home)

A deprived income charge may apply if a reasonable income is not earned from assets or investments, and there are resources available to the client to pay for their residential care.

Example

A client chooses to keep savings in a capital growth fund that does not earn reasonable interest. A reasonable interest amount is at least 2/3 of the Reserve Bank 6-month term deposit rate.

When a person sells or gives away an asset, the future income earning potential is included in the transaction.

This means the Ministry of Social Development cannot assess deprivation of income on a gifted or sold asset.

If an asset is gifted in excess of allowable amounts or sold for less than fair value, the deprived asset amount is inclusive of the future income potential of that asset, and so no deprivation of income is assessed.

Any decision to include a deprived asset or income stream in the financial means assessment outside the 5 year gifting period, depends on whether there are any other resources available to the client that can be used to pay for their residential care.