Hodgson Pete: Social Security (Long-term Residential Care)  Amendment Bill — Second Reading 
Hodgson Pete: Social Security (Long-term Residential Care)  Amendment Bill — Second Reading 
[Volume:635;Page:6250] 
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.