In the new Listener, on sale from 18.11.12

by Toby Manhire / 15 November, 2012
How officials are cracking down on family trusts. Plus, The Mousetrap, John Tamihere, and a quiet constitutional overhaul.
The Government is tightening the screws on recovering rest home costs, with family trusts set up decades ago now considered fair game, writes Ruth Laugesen in the new Listener’s cover story.

It begins:

A year ago, when the Government axed gift duty, it appeared to open the door to the fast and easy transfer of family assets into trusts for those seeking refuge from creditors and rest home asset testing. In the past, moving a family home and other possessions into a trust was a slow business of drip-feeding assets to avoid gift duty. With the rule change, assets could be transferred in one hit.


But those hoping it would become easier to squirrel away capital for the next generation without having it hollowed out by rest home bills are in for a nasty surprise. In fact, the change to gift duty has masked a harder line from the Ministry of Social Development (MSD) in recovering rest home costs.


The ministry is swooping on trusts to which people have transferred assets in one lump sum, and then sought a rest home subsidy. It says there have been a number of cases since the removal of gift duty in October 2011 in which “clients have made large one-off gifts and have then applied for subsidy”. And operating under the radar, the ministry has tightened a slew of other rules to target assets in long-established trusts. The stakes are high – by 2014, long-term residential care for the elderly will cost the Government $1 billion a year.


The result is that the old middle- and upper-income dodge of moving assets into a trust to avoid paying for rest home care is under siege. “The concern is people did these things in the 1980s and 1990s on one basis, and now the rules have changed,” says Wellington lawyer Greg Kelly, whose practice specialises in trust and elder law.


“The department is taking a much tougher line. It is looking at things really quite hard, and it’s getting more and more difficult to qualify for rest home subsidies if you’ve set up a trust and gifted assets into that trust. It’s effectively altered the rules. I think it’s going to be very hard to avoid the rest home regime, to qualify for a subsidy, if you’ve got significant assets available to you,” he says.


Critics claim radical changes to the way we are governed and to the role of the Treaty of Waitangi could be on the way, as our constitution is quietly reviewed, writes Karl du Fresne.

Jenny Macintyre meets a former Kiwi high-flyer who has a new mission in rapidly changing Myanmar – saving the child soldiers.

After 60 years’ playing in London, Agatha Christie’s whodunnit The Mousetrap is coming to Wellington. Jane Clifton examines the mystery of the mystery.

And Guyon Espiner talks to outspoken talkback host and former MP John Tamihere. He has travelled a rocky road, but now he’s back again tilting at Labour windmills.

Anna Fifield pens the Diary column from Washington DC, and the two-minute interview is with the remarkable Mike Maihzri.

Among the columns, the dangers of a sedentary lifestyle, what motivates leaders, and the rest of the stable.

Leading the arts pages, Kiran Dass talks to Edna O’Brien, whose new memoir, Country Girl, is all drawn from memory. “Only the very young or the mad keep diaries,” she says.
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