Aged Care Costs in New Zealand 2026 — Rest Home Fees and the Residential Care Subsidy

At the current Maximum Contribution rates ($1,513.33 to $1,634.43 a week depending on region), a year of contracted rest home care comes to roughly $78,700–$85,000. Fees paid privately come out of a person’s own money, so they can reduce what is left in an estate.

Types of Aged Care in NZ

Rest home level care

For older people who cannot live safely at home and need care around the clock. Residents may still manage some daily tasks, but help with showering, dressing and moving around is common.

Cost range: For a needs-assessed resident the government sets a Maximum Contribution of $1,513.33 to $1,634.43/week (varies by district, effective from 1 July 2026), this is the most a subsidised resident can be charged for standard care.

Hospital level care (psychogeriatric / long-term medical)

For older people who need nursing because of illness or disability. A person with dementia may instead be assessed for a dementia rest home or a specialist (psychogeriatric) hospital.

Cost range: For a needs-assessed, subsidised resident, the same Maximum Contribution for a standard room applies regardless of care level ($1,513.33 to $1,634.43/week from 1 July 2026), moving from rest home to hospital-level care does not increase what a subsidised resident pays, since the government top-up absorbs the difference. Premium room charges are paid privately on top of the cost of care.

Home support (before residential care)

Some people get support at home before moving into residential care. Health NZ (after a needs assessment) may fund some home support, and ACC may help after an injury. Home support needs are assessed by a Needs Assessment and Service Coordination (NASC) agency, not Work and Income.

The Residential Care Subsidy

If your assets are at or below the threshold and you pass the income test, the subsidy is the difference between what you are assessed to contribute from your income (mostly NZ Super) and the cost of care. This is the Residential Care Subsidy, paid by Health NZ - Te Whatu Ora, with Work and Income doing the financial means assessment.

Asset thresholds (from 1 July 2026, adjusted annually for CPI)

Assets above the applicable threshold: you pay the full cost privately (homeowners aged 65 or over may get a Residential Care Loan). Assets at or below the threshold: you then go through an income test, and the subsidy covers the difference between your assessed contribution and the cost of care.

Note the trade-off for a couple with one partner still at home: excluding the family home and car from the assessment means a lower threshold ($164,731) applies to your other assets, while including the home and car raises the threshold to $300,811 but brings the home’s value into the test.

How NZ Super interacts

When you receive the subsidy, most of your NZ Super is used to contribute to care costs. You keep a small personal allowance ($58.34/week, plus a separate annual clothing allowance of $365.92, as at the most recent adjustment).

What Counts as an Asset

WINZ assesses your total assets including:

• Cash savings and term deposits
• KiwiSaver balance
• Shares, managed funds, investments
• Loans to a family trust (see below)
• Life insurance surrender value
• The family home — in some cases

The family home

• If you’re 65 or older and your partner is not in care: you choose whether to include the home and car in your assets, with a $164,731 threshold if you leave them out and $300,811 if you include them
• If you’re single or your partner has also entered care: The home may be included in the assessment
• If you’re 50 to 64 and single with no dependent children: you automatically meet the asset test

For a couple where one partner is not in care, choosing whether to include the home and car decides which asset threshold applies.

Trusts and Asset Protection

Work and Income checks assets that have been gifted or moved into a trust. The gifting rules work like this:

Gifting limits (from 1 July 2026)

• Within the 5 years immediately before applying: up to $8,500/year of assets you and your partner have gifted is not counted (up from $8,000/year), a total of $42,500 across the 5-year period
• More than 5 years before applying: the allowable gifting limit is $27,000/year per couple
• Gifts above these limits are added back to your asset assessment as deprivation of assets

WINZ checks assets you or your partner have gifted or sold, including gifts from more than 5 years ago, which have their own yearly limit. Giving your home to children counts as gifting, so only the part within the gifting allowances above is left out of the asset assessment.

Trust assets: Loans to a family trust count as assets, and Work and Income asks for more information if you have transferred assets to a trust or been its settlor, trustee or beneficiary. This is a complex area, specialist legal and financial advice is essential.

Needs Assessment

Before entering residential care, you need a Needs Assessment through your local NASC (Needs Assessment and Service Coordination organisation). This determines:

• Whether you need residential care (vs supported home living)
• What level of care you require (rest home, hospital level, dementia)
• Eligibility for government-funded support

Your GP can provide a referral.

The MSD/WINZ Application Process

To apply for the Residential Care Subsidy:

1. Book a needs assessment with your local NASC
2. Complete the financial means assessment form and return it to Work and Income with your supporting documents (if you’re 65 or over, within 90 days of the date you want the subsidy to start)
3. WINZ assesses your assets and income using the means test
4. If eligible, the subsidy begins — NZ Super mostly contributes to care, with small personal allowance retained

If you’re 65 or over, the subsidy can be paid from up to 90 days before Work and Income received your application, depending on when you qualified.

Planning for Aged Care Costs

For people in their 50s and 60s

• Understand the asset threshold and how your current assets compare
• Review whether a family trust established years ago will protect assets (legal advice essential)
• Talk to your family about preferences and expectations

For people with a parent entering care now

• Understand the means test process before making any asset movements
• Do not transfer assets to reduce the assessment without legal advice first
• Contact WINZ early to understand the timeline and process
• Speak with a solicitor about any family trust structures

What NZ Super Contributes Toward Care

Once receiving the Residential Care Subsidy, your NZ Super payment is redirected:

The personal allowance is what you keep each week, and Work and Income pays a separate clothing allowance on top.

Key Contacts and Resources

• Work and Income — workandincome.govt.nz — Residential Care Subsidy applications
• Your local NASC — needs assessment for care level
• Age Concern NZ — ageconcern.org.nz — support and advocacy
• Citizens Advice Bureau — free advice on rights and process
• Community Law Centres: free legal help for people without much money (many do not advise on wills or trusts)

Next Steps

1. Check the current Residential Care Subsidy asset thresholds at workandincome.govt.nz
2. Calculate your current assets vs the threshold to understand your private pay period
3. If you have a family trust: get a solicitor to review whether assets are protected under current WINZ rules
4. Have a family conversation about care preferences — what type of facility, and where

→ Related: Retirement Villages NZ | Wills and Estate Planning NZ | Retirement Hub