Funeral bonds and Centrelink

How can investing in a funeral bond impact on your aged pension?

There are several reasons why people decide to address your funeral costs in advance. These can include saving family members the financial and emotional burden of organising a funeral, being able to choose the exact nature of their funeral service or even receiving a favourable assessment from Centrelink in terms of the aged pension.

It’s the last point that many people are unaware of, especially the way in which different investments aimed at paying for funeral expenses are treated by Centrelink.

As an example, it’s possible that investing in a Funeral Bond may lower a clients total assessable assets and increase the amount of age pension they receive from Centrelink.

How does this work? On 1 July every year, the Funeral Bond Allowable Limit is set. For the current 2018 – 2019 financial year, the limit has been set at $13,000. This means that investments up to this threshold may be exempt from the assets and means income test. Depending on a investors specific circumstances, this can have the effect of providing a boost to their age pension payment.

As investors’ needs and aspirations differ, you should consider whether investing in a Funeral Bond is appropriate for you. To help you make an informed investment decision, we recommend you obtain independent professional advice from a licensed financial adviser and/or tax adviser before investing.

For more information, read about the Foresters Funeral Bond here, or take a look at the Department of Human Services website here.

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