A funeral bill is a considerable expense at a difficult time. The typical service can range from $4,000 for a basic cremation to more than $20,000 for an elaborate, personalised services. The person who signs the contract with the funeral home is ultimately responsible for payment. Funeral expenses may be claimed from the deceased’s bank account. The deceased may have even financially planned for this expense, however their family may not be aware of this. Here we explain some ways that funerals can be financed and tips on where to find financial assistance.
Pre-planned funeral expenses
Your loved one may have a pre-paid funeral, funeral bonds or funeral insurance. If you are unsure if any policies exist, check through their files, the will and the estate manual (if the deceased created one).
Pre-paid funerals are becoming less common with funeral insurance being more popular. Check bank and credit card statements for any likely ongoing insurance charges on a monthly, quarterly or annual basis. It’s also a good idea to search through mail, filing cabinets and email accounts. If you don’t have access to the deceased’s email the next of kin may show the death certificate to the email service provider for access.
Using the deceased’s bank account
The funeral may be paid from funds available from the deceased’s bank account. The bank may pay the funeral home directly or they may reimburse on proof of payment. Banks generally accept a doctor’s certificate of death and either an itemised invoice or receipt. Your funeral director can provide the information you need and coordinate with the bank for payment.
Banks will only pay for the service and direct burial or cremation costs. The wake, headstone and memorial need to be paid separately. Check with the deceased’s bank directly as all banks have policies on how funerals can be paid.
Department of Veteran’s affairs
The DVA offers both bereavement payments and/and funeral benefits to eligible veterans. The bereavement payment is paid at the rate of the veteran’s pension and is payable to the spouse, dependent child or estate of the deceased. A funeral benefit is a once off payment of up to $2,000 to assist with the funeral cost of the eligible veteran or dependent.
- Bereavement payment. The partner, dependent or carer of a deceased veteran or the veteran’s estate may be eligible for a bereavement payment from the DVA. There is usually no application required and payment is made as a once off lump sum payment. The payment is to help with the costs following the death of a member. Payments are made at the same rate as the deceased veteran’s pension. It is calculated on a time period of between 2 and 14 weeks, depending on the veteran’s status as a single or couple and on their type of pension.
- Funeral benefit. A funeral benefit may be granted to a veteran who, at the time of death, was receiving one of the qualifying pensions. The next of kin or estate may need to apply to the DVA for the benefit as it is not always automatically paid, specifically prisoners of war. There are other special categories for funeral benefits, including veterans who died in needy circumstances and wholly dependent partners or minor children, so it’s always best to check directly with the DVA. A funeral benefit is a once off payment of up to $2,000 to assist with the funeral cost of the eligible veteran or dependent. The dependent spouse, dependent child or estate should make the claim to DVA within 12 months.
Centrelink Bereavement Payments
Centrelink offers a 14 week bereavement payment, paid at the same rate as the deceased’s Newstart Allowance, Parenting Payment or Carer’s payment. Payments may continue beyond 14 weeks for carer’s payment, wife pension and partner allowance. If married, the spouse receives the payment as a lump sum.
State funded funerals
The deceased may have insufficient funds for their funeral and the immediate family (adult children and spouse) can’t afford a funeral. This is known as a ‘destitute funeral’. The next of kin or close friend can apply to the state or territory where the deceased resided for government assistance. Each state has varying application processes, for example; via the magistrate court (Qld), Funeral AssistanceSA, BereavementAssistance.org.au (Vic). As part of the application process you may need to provide their death certificate, will (if available), bank statements and a declaration that there is no one that can help with the cost of the funeral.
Governments can only assist with simple cremations, however a burial may be requested. Government assistance does not cover wakes or memorials. The government department will determine where the deceased will be buried or cremated, and they may be buried in the same plot as two or three others. In most states the funeral home is not allowed to offer any choice of service, casket, allow flowers, church service or extras. Family and friends can’t place a headstone, memorial or plaque on the site. State government funerals are mostly common for unclaimed bodies and persons with no funds who die without family or friends.
If state funeral assistance was provided off incorrect information the applicant or estate may need to pay back all associated funeral costs. The government is entitled to recover funds from the estate to pay back the cost of the funeral. If anyone becomes aware of money owed to the estate, they must advise the Department of Justice and Attorney-General.
Homicide Victims
If an immediate family member died from an act of violence you may be eligible for assistance from the state government, state police services or homicide victims’ support group.
Most state governments have funds available for the families of homicide victims. These funds can be put toward a range of expenses, such as travel to court, crime scene cleaning, as well as funeral expenses. Independent Victim Assist organisations may be able to offer financial support for funerals, which varies significantly between states and territories.
Loans
Loans may be available for families who can’t afford to pay upfront. A quick google search will show some financial institutions who specialise in these loans.
Reimbursement
If there is no policy available to help with the expenses the family is typically required to pay upfront. Funeral costs can be claimed from the estate, once established.
Summary
- Most banks can partly or fully pay for the funeral from the funds available in the deceased’s account. These funds can be paid by the bank directly to the funeral director or reimbursed to person who paid for the funeral.
- The Dept. of Veterans affairs and some trade unions provide basic assistance for their members on application.
- In financial hardship assistance may be available from the state government.
- Some superannuation or life insurance policies may have a death benefit to help with funeral expenses. In limited circumstances the next of kin may draw funeral funds from their own super fund.
- The terminally ill may access their super early to pre-pay a funeral.
- If there is no policy available to help with the expenses the family is typically required to pay upfront. Funeral costs can be claimed from the estate, once established.
- Funeral loans may be available for families who can’t afford to pay upfront. A quick google search will show some financial institutions who specialise in these loans.