Some interesting facts for a pensioner investing in a funeral bond!

A pensioner can invest in a funeral bond up to a maximum threshold (currently $13,500) and their policy will be treated as an Exempt Asset for pension assessment purposes. This can have significant benefits for pensioners.  For example, for someone with assets just over the threshold, a funeral bond investment may bring them just under the threshold to allow them to qualify for a Pensioner Concession Card (and all the benefits attached to that).  For a part-pensioner, a reduction in $13,500 of assessable assets will result in an increased pension of $40.50 per fortnight or $1,053 per annum.

There are also a few interesting facts about the way a funeral bond investment can qualify as an Exempt Asset for pension purposes that maybe are not so well known:

How many funeral bonds can a pensioner have?

A pensioner can have up to two funerals bonds. Providing the total investment for both does not exceed the maximum threshold they will qualify as an Exempt Asset.

How is an investment in a joint bond assessed?

When a couple invests jointly it will be assessed as if each had invested individually. They need to be careful should they wish to make another investment individually. If they invested for example $10,000 in the joint bond the maximum they could invest individually, for the total to be assessed as an Exempt Asset, would be currently $3,500.

If a pensioner exceeds the maximum threshold how is it assessed?   

If an investment in a funeral bond exceeds the threshold the total amount will be assessed as an asset. Should a pensioner need to invest say $15,000 there is a way to minimise the effect. They should invest in two funeral bonds, $13,500 in one and $1,500 in the other. As in this situation a pensioner can nominate the one to be assessed by Centrelink they would obviously select the $1,500 one.

Sureplan Friendly Society is a funeral fund specialist and our funeral bond, Sureplan Gold, is a conservatively managed, low-cost funeral saving and investment option. For more information on Sureplan Gold and/or how an investment may affect your pension, please feel welcome to contact us on 1800 817 105 or, or by visiting