Social Security-Exempt Funeral Investments

Article excerpt

A FUNERAL investment allows an individual to plan and pay for aspects of their funeral, with certain investments receiving an exemption from social security means testing.

These exemptions can be applied to investments in funeral bonds, pre-purchasing a burial plot, and/or pre-paying funeral expenses. Reasons to consider a funeral investment may include:

alleviating the financial burden on family members;

knowing in advance the funeral service that will be provided;

paying expenses in todayas dollars;

receiving a more favourable Centrelink or DVA assessment.

Funeral bonds

A funeral bond accumulates funds to meet future funeral expenses. A funeral bond cannot be surrendered and only becomes payable on death.

Money can be invested as a one-off initial lump sum, through regular instalments or on an ad hoc basis and generally these contributions are capital guaranteed by the funeral bond provider. The bond grows with interest which may also receive a capital guarantee when paid.

Centrelink or DVA will not include the value of up to two funeral bonds provided an individual does not also have prepaid funeral expenses, and the amount invested in the bonds to be exempted does not exceed the Funeral Bond Allowable Limit (currently $11,500). …