Changes to the Age Pension asset threshold have been much in the news lately, with legislation now passed that means from 1 January 2017, the upper thresholds will be reduced, while the lower thresholds will be increased. For those who may narrowly miss out on a full or part Age Pension due to these new thresholds, there is a cost-effective and legitimate means by which to decrease your assessable assets.
The purchase of a prepaid funeral plan from a funeral director not only decreases the amount of assessable assets you hold under Human Services rules, it also saves your family the hassle and financial worry of planning a funeral. Regardless of the value of prepaid funerals, they are excluded from the asset test. And for those who are considering purchasing a funeral bond, only the first $12,250 (as at 1 July 2015) is exempt from assessment, so you should consider this before purchasing.
So, what’s the difference between a prepaid funeral and a funeral bond?
Quite simply, a prepaid funeral allows you to make all the plans for your funeral and pay at the rate quoted on the day. Prices will not rise and your family will not have to find thousands of dollars in a hurry when you die.
A funeral bond is a managed investment where the interest earned is added to the capital and is paid to your estate or funeral director upon your death.
Of course, not everyone has the money sitting around to pay for a funeral before the event, which is why Guardian Plan, Australia’s leading plan, works closely with various funeral directors throughout Australia and offers payment plans to help you spread the cost. For added peace of mind, should you move interstate, Guardian Plan can help you transfer your plan to another funeral director.
As with any financial decision, you are encouraged to speak with an independent financial advisor before making any commitment.
Find out more about prepaid funerals and the Age Pension at Simplicityfunerals.com.au
For details of how funeral bonds and prepaid funerals are treat under the asset test, visit Humanservices.com.au