Social Security (Long-term Residential Care) Amendment Bill

JUDITH COLLINS (National—Clevedon) Link to this

I rise on behalf of the National Party to speak on the Social Security (Long-term Residential Care) Amendment Bill. I am a member of the Social Services Committee; in fact, I am the deputy chair. As such, I was part of the process of listening to the people who came to the select committee to submit in relation to this bill.

When we look at the bill presented to us in the House tonight we see, sadly, that something is missing—that is, there is no report from the Social Services Committee on this bill. Absolutely no amendments whatsoever are contained in this bill. There is a reason for that, which is that the Government did not turn up in sufficient numbers to get its own bill through the select committee. So after all the submissions from submitters, after all the hours we spent on the bill, and after all the discussions, the Government could not turn up in sufficient numbers to put through its own bill, and that is an indication of a Government in crisis. The Government’s coalition and supporting parties turned up, but the Government did not turn up. Those parties did their bit, they did as they were told, yet Government members did not turn up. Rather, to be utterly correct, they turned up and then went away. They did not turn up for the vote. But the most amazing thing is that the chair of the select committee—the person who actually controls the agenda—is a Government member. So the Government has lost control of its own chairperson.

Unfortunately, that means that in front of us tonight is a bill in its original form, as presented to the House for its very first reading. But today is its second reading; we will have to wait until the Committee stage to debate the changes the select committee agreed to make—actually, it did not agree to make; it wanted to make—which the Government will very soon be trying to push through on a Supplementary Order Paper.

I commend to the House the Supplementary Order Paper to come in the name of my colleague Dr Paul Hutchison. One of National’s concerns about this bill is addressed by Dr Paul Hutchison’s amendment. His amendment would allow elderly people with up to $150,000 worth of assets to purchase an apartment within a rest home and still retain their subsidy. Previously they unfairly lost the subsidy if they used their assets or money to purchase an apartment. Dr Hutchison has taken the stance of improving a bill that in one case in particular National does not agree with.

The issue in the bill that we find so absolutely obnoxious, apart from the point addressed by Dr Paul Hutchison’s Supplementary Order Paper, is that the bill says to rest home residents that even if they want to pay more for a service, they cannot do so. In fact, it states that if a person in a rest home has been assessed as being in need of care, that person cannot pay more for the service than that amount the Government has decreed. That might sound fine to people who feel that nobody should be able to rise above whatever they think the lowest common denominator is, but it means that people who build rest homes or facilities for the aged, and for those who cannot live either in their own homes or with their families, will not be able to afford to build those facilities in areas where property values are higher than in other areas. It is as simple as that. At the end of the day a rest home is a business. Yes, it is a provider of services for vulnerable members of the community, but at the end of the day it is also a business. If we wish to ghettoise our elderly, then this is exactly the sort of bill to pass. There are many good parts of the bill, but this main part, this utter disregard for the ability of the elderly to contract for services in their own right, is an imposition on those people. It says they cannot live in areas they wish to live in, they cannot pay for services they wish to pay for, and that, in fact, they must have, and pay for, the lowest common denominator.

What we find so offensive with this provision is not so much that that is what it says, but that it also says that even if the elderly person is paying his or her own way—even if it is someone who has said “I don’t want a cent from the State. I have more of my own money.”—and even if that person is assessed in a medical sense, then instantly his or her ability to contract for services, which should be able to be provided at the rate he or she wants, has been affected. That is treating the elderly who wish to pay their own way as though they are mere children. They are not mere children, and that is the provision we on this side of the House find so utterly distasteful—that some bureaucratic body down in Wellington should tell our elderly people, who wish to and can afford to pay for themselves in their old age, what they can have and what they can pay for. [Interruption] It is, in effect, as Dr Paul Hutchison has just said, communism. It is absolutely distasteful to our elderly.

We received submission after submission from people who objected to that sort of imposition. We heard from rest home people who said that, frankly, it means they cannot afford to have rest homes and provision for the elderly in suburbs where the price of land might be high, because who could afford to have them? Rest homes will be ghettoised if this stupid provision prevails. National members see no problem with raising the asset level for means testing. We understand that absolutely, and we think it is only fair in light of the inflation that has occurred in this area under this Government.

But when we say to the elderly that we will treat them like children—that even if they are paying their own way we will treat them as though they are little children who cannot make up their own minds—that is an absolute breach of human rights. I am astonished that other parties in this House think it is OK to treat elderly people like that. We are all for saying to people that if the State is paying their way, the State should have a say in what is provided for them. But if the State is not paying their way, what in the world does the State have to do with telling them what they can get?

The way around this will be that the elderly who do not wish to live in particular areas, and who do not wish to be told what they can and cannot pay for, will revert to serviced apartments instead. That will not help the elderly. It will mean that they will not have the same regulations or the same ability to have certain products and services that rest homes can provide. It will affect elderly people’s choice. Why is it that we think it is all right to treat our elderly people like that? In the National Party we do not think that. National agrees with certain provisions of this bill, but not with that particular one, or with the issue that Dr Hutchison’s Supplementary Order Paper will deal with. Those two concerns are absolute sticking points.

I have to say that when we have a bill presented like the one we have today, from a select committee that is controlled by the Government and its minor parties, with not one scrap of the work of the select committee and its amendments included, and with no commentary whatsoever, we have yet again another piece of evidence that this Government cannot get the numbers, even in its own caucus.

BARBARA STEWART (NZ First) Link to this

On behalf of New Zealand First I rise to support the second reading of the Social Security (Long-term Residential Care) Amendment Bill. We understand that the amendments in this bill address a number of anomalies in the Social Security Act. I must say at the outset that New Zealand First does not have a member on the Social Services Committee, so we did not participate in the select committee process. We are looking forward to ensuring that the changes discussed in the Supplementary Order Paper that the select committee worked on during the select committee process are implemented and discussed widely during the Committee stage as they appear to be sound additions to the bill.

In New Zealand First we recognise that the treatment of our seniors sends a clear signal of our status as a developed nation. We must have high-quality, affordable care available for all older New Zealanders when they require this and, of course, everyone needs some certainty about how much money they will need to contribute to their care. In New Zealand First we are adamant that retired couples must be able to grow old together, with all of their due entitlements. So we were very pleased to hear from the Minister prior to the dinner break that couples residing together in a retirement village under an occupation right agreement, or a “licence to occupy” agreement, are able to stay together when one partner has been assessed as needing care. Any separation of couples at this time in their lives—or at any time in their lives, actually—is totally unacceptable and quite ridiculous.

New Zealand First wants to ensure that if a senior citizen is eligible for a subsidy, then that person should receive it, and if that person is receiving the same care package, then he or she should pay the same price. If someone with an occupation right agreement is assessed as needing rest home level care that is provided at that person’s place, then the Government should pay for that care, and the owner of the facility should not be paid twice for the accommodation component.

Currently, there are examples of district health boards and providers negotiating fair solutions to this situation, and we believe that this can happen right across the country. The amended bill allows willing parties to find a solution to this problem, and it is fair to say that the Government expects them to work together to come up with a solution. This means, really, that residential care providers will need to address the way in which they write their retirement village occupation right agreements, and district health boards will need to address this issue in their age-related residential care contracts. So we were quite pleased that we were able to work with the Government to resolve this matter and reach a fair and equitable solution, and we will be monitoring this situation very closely to ensure that it follows through on these undertakings.

This bill, as the Minister has also said, allows those exempt from a financial means assessment—that is, asset testing—to retain a personal allowance. The bill clarifies that any person who is needs-assessed as requiring long-term residential care indefinitely in a rest home or hospital that has a contract with a district health board will pay no more than the maximum contribution for the services set out in the district health board provider contract for services, whether or not that person is subsidised.

The bill clarifies that if the cost of the contracted care services provided to a resident who is assessed as requiring care exceeds the maximum contribution, then the funder is liable to pay the difference. The bill also makes it clear that even if people have assets worth more than $150,000, they will pay no more than the maximum contribution for their care. However, after listening to previous speakers in the first reading debate, it is fair to say that those people who have worked and saved towards this period of their lives may wish to have some additional comfort factors, including some that they may have already had in their own home, that can be provided in a residential care facility and that they will want to pay for and have. This issue does need to be considered. So we look forward to the Committee stage of this bill in order to have this issue discussed further.

We understand that there are approximately 28,000 people currently in aged residential care who will be affected by this bill. Many of us in this House are only too aware that the cost of residential care very quickly erodes the savings many people have worked for and carefully put away for their senior years. We have all had people visit our electorate offices and discuss this issue at length, as they believe the exemption provides some challenges, and I know that work on this issue is progressing.

The annual clothing allowance that people are entitled to retain when they are in care is another issue being raised as a concern. Basically, this allowance is insufficient when laundries at rest homes cannot adequately care for clothing. Woollen clothing in particular suffers when it is washed in a washing machine with very hot water—as it must be—and then put through a dryer. Quite often it is impossible to wear that singlet or that cardigan and, of course, those clothes never ever look the same again. They definitely look tatty, and that is not the way many people would wish their elderly relatives to look. We know that clothing is often lost, never to be seen again, and it is becoming extremely challenging to ensure that the basic clothing allowance is adequate for any wardrobe. This area will need to be addressed again in the short term, I am absolutely sure. It is very challenging for people to have to make the annual allowance of $255 stretch far enough for sufficient clothing for a winter and a summer wardrobe—and, of course, to cope with replacement and lost items.

We are pleased to see that this bill now treats New Zealand and overseas private pensions and annuities equitably. This means that in both cases only 50 percent of a private pension or an annuity is to be included as income in a means assessment. Previously, 100 percent of overseas private pensions were treated as income. The treatment of overseas private pensions as income in that assessment is unfair and it is good to see that this anomaly has now been amended.

So New Zealand First supports this bill. With an ageing population, it is absolutely essential that we ensure those requiring long-term residential care have the best possible care and some certainty about the costs of that care. Thank you.

SUE BRADFORD (Green) Link to this

This Social Security (Long-term Residential Care) Amendment Bill, as even its most avid supporters I think will agree, is simply aimed at fixing up some of the confusions and anomalies discovered after the passage of the parent Social Security (Long-term Residential Care) Amendment Act in 2004. The Green Party has no problem with continuing to support the key goals of this amendment to the amendment Act. The changes made here are, on the whole, technical ones, and the low number of submissions from the public to the Social Services Committee—only eight altogether—seems to indicate that this bill overall does not deal with matters of intense controversy or matters of deep immediate concern for most New Zealanders. However, we are also aware that a huge number of people are in fact affected, or are potentially affected, by the provisions of this bill.

First of all, we are pleased in particular that this bill does clarify that people with disabilities who are living in community residential services and who are receiving a residential support subsidy are also eligible for the disability allowance. Secondly, we are also completely behind the extension of the current backdating period for a residential care subsidy, from 28 days to 90 days. As several submitters pointed out at the select committee, there are a number of circumstances in which the 28-day rule does not allow for the realities of someone’s situation to be taken into account. Thirdly, we are also pleased that the bill enables the continuation of a personal allowance, and that clause 12 restores the discretion that was perhaps inadvertently removed by the 2004 legislation in terms of how the ministry deals with cases where people are found to have deprived themselves of assets and income, directly or indirectly, prior to their means assessment.

I will now turn briefly to the matter that has been raised tonight by other speakers before me: the situation of people in “licence to occupy” units who become eligible for subsidised rest home care. Dr Paul Hutchison from the National Party will be putting forward an amendment attempting to deal with this during the Committee stage of the bill, and Green Party members have been having serious discussions of our own about whether to support Dr Hutchison’s Supplementary Order Paper and/or to find other ways of making progress on this issue. Like many in this House, Green Party members feel it is unacceptable that one partner of a couple who becomes injured, ill, or impaired to the point that that person needs full care services, and who is otherwise eligible under the income and asset testing regime, should not be able to stay with his or her partner in a “licence to occupy” unit or apartment rather than being forced to move to another part of a residential complex. There seems to be an inflexibility on the part of both the district health boards and, in some cases, the providers, in trying to work through this situation.

I have been stunned to find that as part of the district health boards’ standard Age Related Residential Care Services Agreement, clause A14.1 states outright: “To avoid doubt you must not be party to any other arrangement (for example, a licence-to-occupy or similar arrangement) that results in you effectively receiving payment, benefit, … to a Subsidised Resident …”, and so on. I would have thought that the Government, as part of its “ageing in place” strategy, should be doing everything it could to encourage people to stay in their own homes for as long as possible, rather than the district health boards having a national policy of forcing people apart, should they still be fortunate enough to be a couple.

It was heartening to hear the Minister of Health say earlier tonight that he was interested in calling on residential care providers and district health boards to address this issue—in the case of the providers, how they write their occupation right agreements, and in the case of the district health boards, how they write their residential care contracts. But I am unsure as to how forceful the Minister’s message will be without legislative backing. It is not that the Green Party wants to see providers double-dipping in any way; it is just that we cannot see why someone who would be eligible for the residential care subsidy anyway, and who happens to live in an appropriate level apartment or unit as part of an existing complex—profit or non-profit—should not be able to receive the subsidy without having to move into another part of the complex without his or her partner.

However, having said this, I point out that we have some reservations about the National Party’s amendment. Although we sympathise with the amendment’s intent, we feel unsure about whether it will achieve its goals in its current form. I am keen to discuss the amendment further with Dr Hutchison and other colleagues, in the hope that we may find a clear, sensible way through this problem, without allowing inadvertent double-dipping or other unintended consequences.

Dr PAUL HUTCHISON (National—Port Waikato) Link to this

Thank you, Mr Assistant Speaker, for the opportunity to speak on the Social Security (Long-term Residential Care) Amendment Bill. I must say it is good to hear that the Green Party is taking seriously this amendment, which is an outstanding example of how the Labour Government has, once again, failed the elderly of New Zealand. This may be a small incident, but it was very important for an elderly couple who had been living together for 57 years, to age together. This was so important for them that their daughter bought them an apartment—they had no assets themselves—worth $150,000, next to a rest home. But due to the Labour Government’s policies, and to one of the 21 district health boards that it has unnecessarily imposed on the New Zealand public, this elderly couple was prevented from receiving the subsidy that the wife was legitimately assessed for.

It is an utterly deplorable situation when the Labour Government, which talks so often about ageing together, and which talks with such largesse about its care for the elderly, does not worry about the details when it comes to an elderly couple such as this one. It is no coincidence that this bill has no commentary. That is because the Labour members of the Social Services Committee failed to turn up to a select committee meeting on the bill that was very important to the elderly. It has taken a very good amendment from the National Party, in my name, to put right the situation that this elderly couple suffered in, in order to ensure that they could stay in the apartment they had bought. The extraordinary thing about this situation is that, fortunately, their daughter had enough money to be able to support them, even though they did not have the subsidy. But many dozens, if not hundreds, of elderly couples in New Zealand will be in a similar situation and will not be able to afford that luxury.

I was very glad to hear the Green Party constructively suggesting that it will, if not support the amendment, at least work with National to ensure that this flagrant anomaly that was created by the Labour Government is indeed sorted out.

I also remind the House that this Labour Government also ignored the PricewaterhouseCoopers report of 2000. The aged-care sector has been chronically underfunded. One would have hoped that in a time of reasonable economic growth the Labour Government would respond to its own report, but it totally ignored it. Even worse is that an incident like the one that concerns this couple was sorted out in the House just a couple of months ago, with the New Zealand Superannuation and Retirement Income Amendment Bill. In that instance, a 90-year-old pensioner, who was living alone while his wife who had Alzheimer’s was in a residential care unit, was denied the living alone allowance for a superannuitant because of this Labour Government’s rules. The Hon Dr Nick Smith took the case—

RUSSELL FAIRBROTHER (Labour) Link to this

Having listened to the last contribution and the one before it, by Ms Judith Collins, I feel it incumbent—

Hon MARK BURTON (Minister of Justice) Link to this

I came to the House tonight in readiness for the Crimes of Torture Amendment Bill, but I have to say that Dr Hutchison has moved me to take a short call on this Social Security (Long-term Residential Care) Amendment Bill. Although I am well accustomed to the rampant—I cannot use the word that begins with “h”, I will not use it; I cannot even refer to it, so I apologise for even implying the word—I simply could not remain seated having observed the crocodile tears and listened to the mock concern for the elderly from that man, Dr Hutchison. He came to the House, I think genuinely, relatively recently.