A new method has been proposed for rating the seismic resistance of degrading bracing elements used in buildings constructed to NZS 3604. Most of these bracing elements are formed from thin cladding panels nailed or screwed to light timber frames, but the rating method is also used for bracing elements constructed from other materials. A new analytical model was developed as part of this study to accurately model the load-displacement responses of these bracing elements. A continuous pseudo-dynamic test method was developed to assess the accuracy of the analytical model in the BRANZ structural laboratory. The analytical model accurately predicted the time-displacement responses of three, pseudo-dynamically tested, 5.4 m long, light timber framed wall specimens, providing confidence in its use. The new rating method has shown that P21 rating procedure, used since 1979, was dangerously unconservative for the tested specimens. Factors that led to this discrepancy are briefly described. A simple modification to the current P21 rating procedure is proposed to re-rate specimens from existing test results, but this needs to be verified for a wider range of specimen responses than the three described herein.