How a relationship with a big age gap can affect your financial decisions – Diana Clement

As the years pass some older partners will develop significant health or mobility problems, requiring assistance at home. If the younger partner gives up work to provide that caring, the couple can lose an all-important income, although they may qualify for Supported Living Payment or Carer Support funding.

Couples with a large age gap need to plan for one partner’s longer retirement. Photo / Getty Images

If those health issues deteriorate to the point where one partner needs to move into care, the couple’s nest egg can be eaten up, leaving the younger partner a lot less than expected to survive on for the remaining decades of their life.

That’s because in New Zealand, anyone with sufficient assets must pay a weekly contribution for their care, which ranges from $1513.33 in the Far North District to $1634.43 in Auckland City.

As at July 1, 2026, the asset threshold for a Residential Care Subsidy is $164,731 excluding the family home and car, or $300,811 including them, where the person has a partner remaining in the community.

“Residential care is means-tested, and when assessing eligibility, MSD [Ministry of Social Development] may take into account assets belonging to either partner, even where the couple has otherwise kept their assets separate,” Kerry Reed of DTI Lawyers said.

A “pre-nup” may not protect age-gap couples from care costs. Photo / Getty Images

But here’s the catch. “MSD generally treats spouses and partners as one economic unit when assessing eligibility for a Residential Care Subsidy. This means assets belonging to either spouse can be taken into account, even if those assets are treated as separate property,” Reed said.

In short: “my” assets become “our” assets for Residential Care Subsidy purposes even if they’re protected by a contracting out agreement or inherited as separate property.

All couples, not just age gap relationships, need to set up enduring powers of attorney, otherwise they can be left scrambling if one partner can no longer make financial and medical decisions themselves.

They also need a will. New Zealand’s relationship property and succession rules can interact in complicated ways, and if the estate planning hasn’t been done well the remaining partner can be left with insufficient finances to cover ongoing living expenses. Scenarios such as the remaining partner needing to downsize or restructure their living arrangements due to the financial impact of the subsidy are not uncommon.

Finally, there is no one-size-fits-all answer to all of this. What it does require, is going in with your eyes open, and getting good legal, tax and estate planning advice.

Catch up on the debates that dominated the week by signing up to our Opinion newsletter – a weekly round-up of our best commentary.