2f3ded9f_l___Tax_Policy__Inland_Revenue__Area_affected
[Level of risk] Low – the Ministry of Health is confident that the existing legislation and policy provides adequate protection to prevent access to the Residential Care Subsidy where applicants have deprived themselves of assets prior to requiring residential care. Because the means-test for the Residential Care Subsidy provides for adding back gifts and dispositions of property for inadequate consideration, no changes will be required to the means-test if gift duty is repealed. MSD notes that the low level of risk depends on the availability of adequate resources and time to address the operational impacts of gift duty repeal. Repeal is expected to make identification of deprivation less visible, therefore MSD would be required to obtain more information and verification from clients at initial application. [Agency] Ministry of Health (policy) and MSD (administration) MSD to review its administration of the means assessment to ensure the right financial information is collected, including details of historic, lump-sum gifting. [Recommendation] MSD work would need to include amendments to the information requested at initial application, particularly to better capture gifting that transpired prior to the five-year look-back period. MSD staff training would be required around the operational impacts of the changes. There would also be a greater need to complete land title searches for properties where applicants have spent significant amounts of time living to determine whether it has been gifted by the applicant. MSD would need to revise all client communications, forms and brochures to clarify verification requirements. This would lead to increased operational costs for MSD; however they could be met from within existing baselines. An effective repeal date of 1 October 2011 is expected to provide sufficient time for the work described to be undertaken. [Area affected] 
Access to the Residential Care Subsidy
Gift duty repeal | Tax Policy, Inland Revenue
Area affected