Pre-paying your funeral unlocks a pension boost
Paying $10,000 toward a funeral now gives $30 extra per fortnight in pension payments.
A part-pensioner can pre-pay their funeral and see their pension rise right away. Centrelink removes this money from counted assets, which boosts the pension calculation.
For each $1,000 spent on pre-payment, a part-pensioner gains $3 per fortnight in extra pension. A $10,000 pre-payment gives $30 per fortnight.
Over 13 years, the extra pension recovers the full initial $10,000 payment. Two paths exist.
One is dedicated funeral savings bonds from Australian Unity and Generation Life, the major providers, with a $16,250 limit as of July 1. The other is direct pre-paid plans with funeral homes, with no limit.
Bond earnings are taxed at 30 per cent but attract no tax when accessed. Some bonds generate surplus that becomes part of your estate.
- $3 per fortnight
- Pension boost per $1,000
- $30 per fortnight
- $10,000 example boost
- 13 years
- Recovery period
- $16,250
- Bond limit from July 1
Why it mattersPart-pensioners can reduce counted assets and boost retirement income while locking in end-of-life costs.
AustraliaThousands of Australian part-pensioners can use this strategy to improve retirement income and plan funeral costs simultaneously.
Corroborated by7news.com.au
✓ Claims checked against the source and corrected before publish. checked 2 h ago
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