How A Funeral Bond Can Help Preserve You Pension Entitlements

A funeral bond or prepaid funeral plan can be one way to reduce your current assets, thereby helping to protect your Centrelink pension entitlements.

  • A funeral bond or pre-paid funeral plan can be a Capital Guaranteed investment and is not classed as an asset by Centrelink.
  • You can invest up to $14,000 in a funeral bond and there is no limit to the amount you can invest in a prepaid funeral plan.
  • An additional benefit of a prepaid funeral plan is that prices are fixed – meaning you lock in today’s prices.

Note: Payments for funeral insurance products do not provide the same benefits as a funeral bond or prepaid funeral plan.

How it works:

Since 2017, the pension rate reduces by $3.00 per fortnight for every $1,000 of assets you own over the allowed limit. For example, $10,000 in extra assets reduces your pension by $30 per fortnight. However, funds invested into a funeral bond are not classed as an asset, and will therefore benefit your pension calculations.

The money you invest in a funeral bond grows over time, and when you die, the money is claimed and paid towards funeral costs. This means your family won’t have to provide money to pay for your funeral.

By investing in a funeral bond, you can ensure that your pension entitlements are preserved. And that’s good news for your family and you, both today and tomorrow.