July 1 2017 changes to asset threshold and maximum contribution rates for aged residential care

The price residents in aged care facilities with assets above the threshold pay will increase by an average of 9.9% on 1 July 2017. The majority of this increase is a result of the Care and Support Worker (Pay Equity) Settlement.

Currently 11,070 aged care residents with assets over the threshold are required to pay the maximum contribution towards the cost of their care. This is set in legislation and equal to the rest home price, which from 1 July 2017 is in a range of $974 and $1063 a week depending on their location.

The price increase was signalled when the pay equity settlement was announced in April and confirmed at annual contract negotiations between DHBs and providers in May.

The increase arising from the impact of the pay equity settlement is $74 a week (including GST). Including the annual price increase of 1.8% for general cost pressures, the total increase will be between $89.88 and $91.42 a week depending on a resident’s location (including GST).

The Ministry of Health recognises this is a significant increase, however it addresses a historic undervaluation of care and support work.

The pay equity settlement is also expected to have additional benefits for the quality of care for older residents, including reduced staff turnover and caregivers with more skills and qualifications.

More information for aged care residents and their families is available in this factsheet:

More information on the contribution is available at Maximum contribution.

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