Aged Care Planning

Funeral Bonds are capital guaranteed tax paid investments, designed to help meet funeral expenses.

Taxation and pension benefits

A Funeral Bond also has other benefits including potentially significant taxation and pension benefits. The potential pension benefits apply under current legislation that, up to $12,000 (indexed annually) is treated as an asset exempt from Centrelink’s income test, assets test and deeming provisions. This can result in an increased pension entitlement.

Whether any tax is payable by the estate will depend on the estates taxable income in the year that benefits are paid and the estates marginal tax rate.

Investing tips

For couples it may be best to take out individual Funeral Bonds as both investments will be exempt from the Income and Assets Test. This can result in an increase of $36.00 per fortnight for the couple. You can hold up to two Funeral Bonds, individually or jointly, and still qualify as an exempt asset for Centrelink purposes; however the combined original investment amount must not exceed $12,000.

Payment of Benefits

Benefits can be paid either to the estate or direct to a Funeral Director. Benefits can be paid quickly (normally within 10 working days) and there is no need to wait, for sometimes lengthy periods, for Grant of Probate. This can assist family in the quick payment of a funeral account – in some cases Funeral Directors may offer discounts for quick payment. Any surplus that remains after payment of the funeral account will be paid to the estate.

Get in contact with Joseph, we’ll be able to find the right Funeral Bond for you.