Bradford Sue: Social Security (Long-term Residential Care) Amendment Bill — First Reading 
Bradford Sue: Social Security (Long-term Residential Care) Amendment Bill — First Reading 
[Volume:615;Page:11073] 
SUE BRADFORD (Green) 
: 
 The Green Party like some other parties in this House has mixed feelings about this bill as presented to the House this evening. On the one hand we welcome these Government moves to improve the income and asset-testing regime as it applies to older people in long-term residential care. On the other hand we are disappointed that the bill only moderates the asset-testing regime rather than abolishes it. The Green Party would prefer to see asset testing for residential care abolished altogether. We do not believe that people should be penalised because of their age and feel at the moment that asset testing is a form of discrimination against our older citizens. 
 Indeed the bill as it stands has both human rights and New Zealand Bill of Rights Act implications in that it continues although moderates a means-testing practice that discriminates on the grounds not only of age but also of disability. The initial threshold increases on 1 July this year from $15000 to $150000 for a resident who has no spouse with a whole series of other related increases. The lower threshold for those with spouses not requiring residential care takes into account the fact that any interest in a residential dwelling that is the principal residence is exempted from the asset test. Each of these thresholds progressively increases by $10000 over each of 20 years till 2025 to eventually reach $350000 for those in residential care with no spouse and $255000 for those with a spouse not in care. 
However the impact of the progressive increase in the asset-test threshold over the 20 years following 1 July next year is largely illusory. The asset threshold increases by just under 7 percent for a person with no spouse or a spouse in residential care and by around 18 percent for a person not in care. In the 20th year the respective percentage increases are only around 3 and 4 percent. In many cases the increase in the asset-test threshold will fail to keep pace with the appreciation in value of the assets and/or the invested return on the assets of a person in residential care. As the year 2025 nears it may not even keep pace with increases in the consumer price index. Although there will be an initial dramatic reduction in those subject to the asset test as of 1 July 2005 a progressively increasing number of people will again be required under the proposed asset test to contribute towards the cost of their care over the 20 years between 1 July 2005 and 1 July 2025. 
During the course of considering this bill the Green Party may well be looking at lobbying for certain options such as considering whether we should work towards an annual consumer price index adjustment of the asset-test threshold in addition to the $10000 annual increase and/or a reduction in the period over which the progressive increase in the asset threshold occurs. These options could provide for a much more genuine phase-out of asset testing than that I have described as taking place between 2005 and 2025. 
We will also of course be interested in hearing what I am sure will be a goodly number of submissions during the select committee process. I am sure there are many interested groups and individuals already gearing up to make fairly powerful submissions right now. This issue has been around for many years. 
In conclusion the Green Party will be supporting this bill because it at least begins the process of improving some of the worst aspects of the current regime. I must congratulate the Government on at least taking these long awaited first steps towards clarifying the situation and improving it for many of our older generation.