If you are receiving a part-pension you probably are relying on drawing down your superannuation fund and/or revenue from various investments to round off your income requirements. Should you have funds invested in fixed interest securities you will know from first-hand experience just how low interest rates are in Australia at present – in fact the lowest on record.
However, there is a way to secure a better “return” for some of your funds. An investment in a funeral bond such as Sureplan Gold, subject to a threshold (currently $13,500), is treated as an Exempt Asset for pension purposes. This is mainly because that, after the first 30 day cooling off period, you cannot make any withdrawals at all as your funds must be retained to help meet your funeral expenses. As the name implies, an Exempt Asset is not assessed as an asset by Centrelink.
Therefore, a part-pensioner couple can each invest $13,500 in Sureplan Gold and have their combined assessable assets reduced by $27,000. This will increase their pension by $2106 annually or $81 per fortnight and effectively represents a return of 7.8% on their investment of $27,000.