Social Security (Long-term Residential Care)  Amendment Bill — Second Reading 
Social Security (Long-term Residential Care)  Amendment Bill — Second Reading 
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Social Security (Long-term Residential Care)  Amendment Bill 
Second Reading 
Hon PETE HODGSON (Minister of Health) 
: 
 I move  
That the Social Security (Long-term Residential Care) Amendment Bill be now read a second time 
. This bill was referred to the Social Services Committee for consideration and was reported back to the House with no commentary or amendments. The implementation of the Social Security (Long-term Residential Care) Regulations from 1 July 2005 highlighted inconsistencies and anomalies in the legislation. The principle underpinning this bill is that all people requiring long-term residential care will be treated fairly. There are no major changes to current practice for long-term residential care for older people. The purpose of this bill is to address the anomalies in Part 4 of the Social Security Act 1964 so that the Government’s policy in relation to long-term residential care for older people can be fully implemented. 
The Government promotes a legislative and fiscal environment that encourages aged residential care services that enhance the lives of older people. This includes fair treatment if an older person is assessed as needing long-term residential care indefinitely. Clarification in this bill of the maximum contribution means that all older people in an aged residential care facility that has a contract with a district health board for Government funding will pay the same price in that region for the same basic packages of services set out in the contract. Providers can offer and people can agree to pay for extra services over and above that basic package of contracted residential care services; nothing in this bill changes that. 
Other changes to the Social Security Act 1964 included in this bill are a redefinition to ensure that overseas private pensions and annuities are treated the same as New Zealand private pensions and annuities when older people are being financially means-assessed for eligibility for the residential care subsidy and clarification of eligibility for disability allowance for people in community residential care services and aged-related care. 
 The Social Security (Long-term Residential Care) Amendment Bill has a number of minor technical amendments including the insertion of a purpose and overview section in Part 4 of the Act to aid understanding of the long-term residential care provision; the increase of the income-from-assets exemption for couples with one partner in care so that they are not disadvantaged compared with single people or couples with both partners in care; and a provision that people who are exempt from asset-testing such as people subject to compulsory treatment orders or who have been deinstitutionalised from long-stay psychopaedic or psychiatric hospitals are able to retain a weekly personal allowance. 
I have released Supplementary Order Paper 37 which addresses issues around the backdating of eligibility for the residential care subsidy the payment of disability allowance and two minor technical amendments. Included in this Supplementary Order Paper is good news for those who will apply for a residential care subsidy. Cabinet has approved the extension of the current backdating period of eligibility for a residential care subsidy. Residential care subsidies will now be backdated for up to a maximum of 90 days rather than 28 days. This is a very positive change that makes a fairer policy for what proved to be an impractical period of time for people to apply for a residential care subsidy. 
The Supplementary Order Paper also enables people with disabilities living in community residential services such as IDEA group homes who apply for a disability allowance within 12 months of the 2006 Budget to receive payment from that date—that is from 18 May 2006—or the date they become eligible to receive it whichever is the later. This means they will receive their full entitlements even if they take some time to apply. Two minor technical amendments included in the Supplementary Order Paper are a change to when the date of repeal of the regulation making the 1 July 2006 consumer price index adjustment to the income-from-assets exemption will take effect and the date that the bill will take effect has been altered to the day after the bill gains the Royal assent. The Social Security (Long-Term Residential Care) Amendment Bill promotes fairness for older people in New Zealand. It clarifies Government policy so that it can be easily understood and applied. 
There is one last matter. I am aware that the National Party has indicated that it is introducing a Supplementary Order Paper. It asks that an additional amendment be made to the bill to ensure that couples residing together in a retirement village under an occupation right agreement—a “licence to occupy”; sometimes known as an LTO—can stay together when one has been assessed as needing care. The Government also believes that couples should be able to stay together as long as it is possible and safe. There seems to be agreement across the House about that. That is the aim of the Government’s older people strategy. The issue has also been raised directly with me by New Zealand First and United Future and I want to thank all those parties for their constructive approaches to finding a solution. 
The entire purpose of this amendment bill is to ensure that older New Zealanders are treated fairly. If they are eligible for a subsidy then they should receive it. If they are receiving the same care package they should pay the same price and if someone with an occupation right agreement is assessed as needing rest home level care which is provided at their place then the Government should pay for that and the owner of the facility should not be paid twice. National’s amendment perhaps unwittingly allows for that double-up payment to occur. Nothing in the amended bill stands in the way of willing parties to find a solution to this problem. The Government expects parties to work together to find a solution and some providers and district health boards have already done just that. Residential care providers will need to address the way in which they write their residential village occupation rights agreements and district health boards will need to address this issue in their age-related residential care contracts. 
I thank the Social Services Committee for its consideration of the seven submissions on this bill and for returning it to the House unchanged. 
PAULA BENNETT (National) 
: 
 There is quite a clear reason why this bill is coming back to the House unchanged. That is purely because a mistake was made by the Government in the deliberations on the bill at the Social Services Committee where Government members did not have the votes to make the changes they had proposed. The Minister left that piece of information out. But when it came to voting at the select committee there were very shocked faces on the other side of the table as Government members saw themselves being without the numbers. In fact one Labour member was heard to exclaim: “But I thought we had the numbers to make the changes.” Alas Government members had not counted correctly. 
I would also like to pick up on something with regard to the amendment because the Minister made a very interesting observation when he said he was in agreement that everyone was on the same side in what we were trying to accomplish in terms of wanting to keep older people living together as long as possible. He said that was favourable and no one could disagree with that. We heard submissions at the select committee and we also heard from advisers and those sorts of people. We kept asking questions and I suppose that from the National Party’s perspective our concern was that those questions were not answered sufficiently to allay our fears. Those fears were around the ability of providers to actually talk to each other and to district health boards and then to address the needs of those elderly people who want to stay in their homes. 
It is not a straightforward and an uncomplicated formula to try to come up with how those people are paid how it all works out and how couples can be kept together. But it was certainly said to us time and time again that if an elderly couple was in a home in a residential care village and one of them perhaps needed more care than he or she was currently receiving that person would have to move out of that dwelling—even though it may be attached to the rest home—and into a room in the rest home purely in order to get that care. That seemed quite ironic when someone could be just crossing the road or leaving one building and walking in another door in order to be able to have that care provided. People may not be at the extreme end of the care continuum; they may be only in the middle of it. But if they are assessed as needing more care than they have been receiving they have to move out of their home. That applies in the case of elderly people who have moved into residential care properties in order to get that sort of assistance and that home. But in order to be eligible for the payment effectively the couple would have to separate and the person requiring care would have to go into the rest home. That is what we took umbrage at. That situation is definitely where Dr Hutchinson’s amendment comes from; that is the whole philosophy behind it. 
I also want to talk about the parts of this legislation that I think address stuff that needs to be addressed. The issue was about people receiving a disability allowance on the same basis really as other people in the community and how we can help them with that. We certainly heard stories about those with disabilities requiring assistance or being in residential care and not being able to get hearing aid batteries or having problems when they needed specialist dental care or primary health care. Providers pay for some things but there are a number of things that they just do not cover. That really struck a chord with me because I started to think about choice which is quite a strong value that the National Party stands by. We believe that choice is an important part of all consumers’ ability to ensure that their particular needs and wants are met and that consumers of residential care of course should be no different from other consumers. They should have choice as well. So we note that through some amendments in this bill we are giving people some finance that is their own money which they can then spend in their own way. That gives them a choice about the sorts of services they can perhaps receive—and not only services but consumer goods as we say. It struck me time and time again that that was positive and definitely needed to be done. 
It used to be presumed that all personal health costs and similar items of a personal nature were excluded because those costs were being met by the residential support subsidy. But of course that just was not happening. The sole discretionary income of a disabled person in care is $45 per week and I do not think in anyone’s terms that that is a lot of money or will cover much of what such a person will need. Because of the lack of access to a disability allowance a lot of those people were ending up going for a special benefit. They had to prove that they definitely needed something and they had to go to Work and Income to try to get a special benefit or something to help them. We heard from the parents of disabled twins who were intellectually handicapped about how those parents were trying to have the twins’ needs met in that situation. 
It was also interesting—and this struck me closely because it affects women—to note that women comprise nearly 70 percent of all the adults in residential care. Four percent of New Zealand’s estimated 743800 disabled people lived in residential facilities in 2001. Those figures are from the last statistics I could find. The bulk of those people were aged 65 years and older; only 8 percent were between the ages of 16 and 65. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
TARIANA TURIA (Co-Leader—Maori Party) 
: 
 Tena koe Mr Assistant Speaker. Tena tatou te Whare. There is a whakatauki that I think will assist this House in understanding the issues associated with the Social Security (Long-term Residential Care) Amendment Bill: He whiringa takitahi ka hunahuna. He whiringa ngatahi ka raranga ka mau. If you plait the strands one strand at a time the ends will fray and fragment. If you weave them together they will hold. In this bill the Government’s policy goals for long-term residential care are being realised. Changes are made to the Social Security Act 1964 to amend the income and asset-testing regime for older people. But those changes on their own will be insufficient to enhance the well-being of our elderly people if the package is not supported with additional measures. As a nation we must accord value and respect to our senior citizens. Promoting health and well-being throughout the life stages is an important strategy for improving the health of the older population. 
The Maori Party comes to this bill aware that the Maori population is ageing faster than the population as a whole. Statistics New Zealand’s expectation is that there will be eight times as many Maori aged over 65 in 2051 as there are now—that is 129000 people. We also know that although the majority of Maori over 65 years remain in whanau homes 2 percent of that population is currently in rest homes and 3 percent is in long-term hospital care so the issues are becoming increasingly relevant. The demographics indicate that there will be an increased need for culturally appropriate residential care to meet the needs of Maori. Indeed befitting the wisdom and strategic outlook of the late Sir Hugh Kawharu one of the consequences of the return of Takaparawhau Park—including Bastion Point—that emerged from the 1991 Orakei Act was that Ngati Whatua established a retirement village and rest home as part of their long-term strategy. It was a strategy that maximised commercial opportunity and incentives to create a sustainable capital base for future descendants but it was also a strategy that took into account the increasing numbers of older Maori including those of Ngati Whatua descent. 
A recent study of some 468 residential care facilities published in the New Zealand Medical Association’s journal describes the evolving needs of our ageing Maori. The study by Liz Kiata Ngaire Kerse and Robyn Dixon identified that although Maori are highly represented amongst the workforce the number of elders in long-term residential care is more variable. Over 50 percent of the facilities in Northland Waikato and Hawke’s Bay had Maori residents. But other centres suggest that there may still be problems regarding the way that facilities respond to cultural concepts of elder care which act as barriers. This issue will become more pertinent as the Maori population ages and as the “middle” generation attempts to juggle caring for tamariki and mokopuna with caring for elderly whanau members. 
How does this bill address the growing need for the care of our kaumatua? The bill ensures that those requiring long-term residential care in a facility that has a contract with a district health board will pay no more than the maximum contribution for care whether or not they are subsidised. In essence the Maori Party supports the changes to the means-testing policies because that is consistent with our desire to care for our pakeke—a commitment to manaakitanga. But we were however very interested in the arguments presented to the Social Services Committee by Susan St John who believed that the opportunity to consider the appropriate funding of long-term care has been lost. It was Ms St John’s contention that there is not enough transparency in the discussions regarding the funding of long-term care. She suggested that without a proper consultative process and serious effort to define the upstream effects of the ageing of the baby-boomer generation the policy will be a fragmented one. Weaving only one strand at a time makes the policy changes vulnerable to pressure from other factors. 
Susan St John also raised the issue that the aggressive use of trusts to evade asset testing has been ignored in this legislation. As such the incentive for the affluent to set up trusts and obscure their wealth still remains. The submission from Susan St John stated that in a society where students are laden with student debt and child poverty is rampant the partial removal of asset testing poses huge intergenerational equity questions. And I want today to warmly congratulate Susan St John and the Child Poverty Action Group on the historic decision by the High Court yesterday asserting the right of that group to act on behalf of children affected by discriminatory Government policies. The Maori Party supports the work that the Child Poverty Action Group has done in raising the issue of the worsened inequalities for a whole generation of children. And we believe that the analysis Susan St John lay in front of the select committee for this bill has also been very useful. 
Another set of issues that came to the select committee from Althorp Private Hospital also bears further discussion. It was concerned that the cost to the Government of raising the asset-testing threshold would be at the expense of funding the provision of services and care to elderly people. And in the study I referred to earlier the researchers concluded that the turnover of the residential care workforce suggests that the industry continues to be under threat from staffing shortages. The study found that the majority of facilities—indeed 63 percent of all those studied—employed Maori health-care workers while 15 percent 70 in number had Maori enrolled and registered nurses on their staff. Of even more interest was the fact that one-quarter of all facilities surveyed stated that they had employees who were speakers of te reo Maori as their first language yet staff turnover was 22 percent annually. Reasons for staff dissatisfaction included low rates of pay no involvement in care planning and low job security. 
Poor funding for quality rest home care for the elderly will inevitably restrict the opportunity for older New Zealanders to be given the attention they require in a timely and an effective manner. Issues regarding the retention of staff an inability to provide culturally responsive care a refusal to give due attention to the vexed issue of trusts and a lack of consultation are all strands that threaten the strength and viability of the proposals contained in this bill. 
The roles played by kaumatua in community decision-making and in the intergenerational transfer of language knowledge and culture are essential to our well-being as whanau hapu and iwi. Kaumatua play a strong role in formal leadership whether in tribal strategic planning or in “leading from the back” through the guidance that continues to sustain marae hui and other institutions. To attain the status of kaumatua is to hold a respected position within the Maori community. In the current climate in which New Zealanders are living longer than previously we must make every possible effort to ensure that increased longevity is matched by improved health status and enhanced well-being. 
The Maori Party will support the Social Security (Long-term Residential Care) Amendment Bill in the understanding that the bill does contribute to supporting the long-term prospects of our aged. But we were disappointed that the select committee chose to overlook the opportunity provided by the wealth of submissions to address some of the issues that I have raised tonight. In particular we remain interested in the notion of a royal commission of inquiry into long-term care proposed by Susan St John and believe that to be an idea that may benefit from further discussion in this House. No reira tena koutou tena koutou tena tatou. 
Debate interrupted.