Funeral Plans for Pensioners in Australia
Pensioners in Australia can pay for a funeral ahead of time with a prepaid funeral, a funeral bond, savings or funeral insurance. Prepaid funerals and burial plots don't count in the Age Pension assets test, and funeral bonds are exempt up to $16,250 (as at 1 July 2026). Funeral insurance can end up costing more than it pays out.
Compare Funeral DirectorsWhat are the options for paying for a funeral as a pensioner?
The main ways to pay ahead of time are a prepaid funeral with a funeral director, a funeral bond, a burial plot, savings, and funeral insurance. Moneysmart, the government's money guidance site run by ASIC, covers saving, funeral bonds, prepaid funeral plans and super, and suggests considering those before funeral insurance. The table shows how each one works and how Services Australia treats it for the Age Pension.
| Option | How it works | Age Pension assets test | Watch out for |
|---|---|---|---|
| Prepaid funeral | You agree the funeral with a funeral director now and pay at today's prices, in one payment or by instalments. | Not counted, with no upper limit, if the contract lists the services, says they are paid in full and can't be refunded. | How well your money is protected depends on your state. |
| Funeral bond | An investment held in a funeral fund. It is only paid out after death, to the estate or the funeral director, for funeral costs. | Exempt up to $16,250 (as at 1 July 2026). | You can't take the money out early, and you must tell Services Australia about it. |
| Burial plot | You buy the grave, niche or right of interment ahead of time. | Not counted, whatever it is worth. | It pays for the place, not the funeral itself. |
| Funeral insurance | You pay premiums and the insurer pays a set amount, usually $5,000 to $15,000, when you die. | Not counted if the policy has no surrender value. | Premiums usually rise with age. If you stop paying, you will probably lose the cover and what you've paid. |
| Savings | Money set aside in a bank account. | Counted like your other savings and investments. | It is easy to spend on other things before it's needed. |
Sources: Services Australia, Funeral bonds and prepaid funerals and operational guidance on funeral investments; Moneysmart, Paying for your funeral and Funeral insurance. Checked October 2026.
How much does a funeral cost in Australia?
A funeral in Australia costs from about $8,000 to around $20,000, depending on the type of funeral, according to Moneysmart (updated September 2026). A direct cremation with no service costs much less. NSW's pricing regulator, IPART, found the median price of a no-service, no-attendance cremation was about $3,800 across around 40 providers in 2021, the most recent independent figure we could find.
That gap matters when you decide how to pay. A prepaid funeral or bond only needs to cover the funeral you actually want. For current price ranges by type of funeral, see our guide to cheap funerals in Australia.
How does a prepaid funeral work?
A prepaid funeral is a contract with a funeral director: you choose the funeral now and pay for it at today's prices, either in one payment or by instalments. Services Australia doesn't count a prepaid funeral in the Age Pension assets test, with no upper limit, as long as the contract sets out the services, says they are paid in full and can't be refunded (except in limited cases, such as moving out of the funeral director's area).
How safe your money is depends on where you live. Moneysmart says NSW, Queensland, South Australia, Victoria and Tasmania require prepaid money to be held in a registered funeral fund, while the ACT, the Northern Territory and Western Australia offer fewer protections. In Western Australia, a code of practice gives you a 30-day cooling-off period and fixes the price when you sign.
Before you sign, ask the funeral director:
- exactly what is included, and what isn't, such as cemetery or crematorium fees, flowers and death certificates
- whether the price is fixed or can go up
- what happens if you move to another area or change your mind
- where your money is held
Funeral bonds and funeral insurance are financial products regulated by ASIC. A prepaid funeral agreement made directly with a funeral director is not.
How does a funeral bond work?
A funeral bond is an investment held in an independently managed funeral fund. Interest is added to the balance, and the money can only be paid out after your death, to your estate or your funeral director, to pay for the funeral.
Services Australia doesn't count up to two funeral bonds in the assets test if the total you've invested is under the Funeral Bond Allowable Limit, which is $16,250 as at 1 July 2026, and you don't also have a prepaid funeral. A bond you own jointly with your partner has the same limit as any other bond, not double. If the bond is assigned to a funeral director as part of a fully prepaid funeral, it isn't counted at all. The limit is reviewed every 1 July.
You need to tell Services Australia about any funeral bond you hold, even if it's exempt. A bond that isn't exempt is treated as a financial investment, so its value counts as an asset and deemed income applies.
How does funeral insurance work, and what are the risks?
Funeral insurance pays a set lump sum, usually between $5,000 and $15,000, when you die, in return for regular premiums. Moneysmart warns that it isn't a savings account: premiums usually rise as you get older and with inflation, and if you stop paying or cancel, you will probably lose the cover and everything you've paid.
Moneysmart gives the example of a policy that started at $20 a fortnight at age 58 and was over $40 a fortnight by age 71, by which time more than $10,000 had been paid. ASIC's 2015 review of funeral insurance found the average yearly premium for people aged 80 to 84 ($1,344) was about four times that for people aged 50 to 54 ($336). In September 2026, ASIC said it expects to review insurers' practices after reports of customers paying more than the benefit.
Moneysmart suggests looking at the total you'd pay over time, not just the first premium, so ask for the premium at each age before you sign. A policy with no surrender value isn't counted in the Age Pension assets test. Since 5 October 2021, insurers haven't been allowed to sell insurance through unsolicited phone calls or other real-time contact without your consent.
This is general information, not financial advice. We don't recommend any insurer or product.
Does Centrelink help with funeral costs?
Centrelink doesn't have a funeral payment, but Services Australia can help in some situations when a pensioner dies. What's available depends mainly on whether the person had a partner who was also on a payment.
| Situation | What Services Australia pays |
|---|---|
| Your partner dies, and you were both on a pension, or on an income support payment for at least 12 months | A one-off bereavement payment, worked out as the difference between your combined couple payments and your new single rate over the 14 weeks after the death. |
| A single pensioner dies | No extra payment. The pension is paid for the fortnight in which they died, then stops. The final payment goes into their bank account. |
| You were their carer | Carer Payment can continue for up to 14 weeks, or Carer Allowance can be paid as a lump sum covering up to 14 weeks. |
| Your partner was registered in the Pension Bonus Scheme and died before claiming Age Pension | You may be able to claim a Pension Bonus Bereavement Payment within 26 weeks of the death. |
Sources: Services Australia, What help there is when an adult dies; myGov, Payments and managing your money when a loved one dies. Checked October 2026.
Tell Services Australia about the death as soon as you can, on 132 300 or with the Advice of death form (SA116). Telling them late can mean money has to be paid back. The Australian Death Notification Service, a free government service, can notify several organisations at once.
If you're on the Age Pension and need money for funeral costs straight away, you can ask for an advance payment of part of your pension, which you repay over the next 13 fortnights. You need to have been getting the pension for at least 3 months.
There is no $50,000 Centrelink bereavement payment. Services Australia doesn't list any such payment, whatever some websites claim.
What help is there for veterans?
The Department of Veterans' Affairs (DVA) can help pay for the funeral of an eligible veteran. From 1 July 2026 there are two rates: a lower rate of $3,000, which is paid automatically for some veterans, and a higher rate of up to $14,990.43 (indexed each 1 July) for those eligible to claim it. The rules on who gets which rate are in DVA's policy library, so check with DVA before the funeral if you can.
What happens if there's no money for a funeral?
Funeral costs are usually paid from the estate of the person who died, ahead of other debts, and most banks will pay a funeral director's invoice from the deceased's account if you give them the invoice (Hobart Community Legal Service). If the person had super, a death benefit may be paid to their beneficiaries or estate, but it can take weeks or months, so it may not arrive before the funeral bill is due.
Every state and territory except Victoria has a government last-resort scheme for people who die without the money for a funeral and whose family can't pay. In Victoria, a not-for-profit provides low-cost funerals. Most schemes cover a basic funeral, often a cremation, through a contracted funeral director, and most are means-tested. The ACT's pays up to $500 towards a funeral instead. Contact the scheme before booking a funeral director: some, including South Australia's and Queensland's, won't help once a funeral has been arranged or a contract signed.
| State | Scheme | Where to start |
|---|---|---|
| NSW | Burial or cremation of people without financial means (NSW Health) | The local health district where the death occurred (NSW Health Pathology for deaths outside hospital or reported to the coroner) |
| VIC | No state scheme. Bereavement Assistance, a not-for-profit, arranges low-cost funerals | Bereavement Assistance, (03) 9564 7778 |
| QLD | Funeral Assistance Scheme (Coroners Court of Queensland) | Your nearest Magistrates Court |
| WA | Bereavement Assistance Program (Department of Communities) | 1800 854 925 |
| SA | Funeral AssistanceSA (Department of Human Services) | 1300 762 577 |
| TAS | Essential Care Funeral, a cremation without a service, run by the Department of Health | Ask the hospital or funeral director for a referral |
| ACT | Funeral Assistance Program, up to $500 towards a simple funeral | ACT Revenue Office, (02) 6207 0028 (option 5) |
| NT | Indigent Persons Funeral Scheme | The NT Coroner's Office |
If you're paying for the funeral of a dependant and have no other way to pay, you can apply to the ATO to release some of your own super on compassionate grounds.
How can pensioners keep funeral costs down?
Four things that make the biggest difference, whichever way you pay:
- 01
Get itemised quotes from two or three funeral directors and compare their cheapest packages.
- 02
Check websites first. In NSW, Victoria, Queensland and Western Australia, funeral directors must show their prices, including their cheapest option.
- 03
Consider a direct cremation and hold a memorial separately, at home or somewhere that matters to you.
- 04
Ask each funeral director whether they have a pensioner or concession price.
Compare funeral directors near you
Tell us what you need and we'll put you in touch with local funeral directors who can quote on a prepaid or at-need funeral.
Frequently Asked
Questions
Common questions about funeral plans and costs for pensioners
How much is funeral insurance for a 70 year old?
There's no single price: it depends on the insurer, the benefit amount and the policy. What matters most is the total you'll pay over time, because premiums usually rise each year. ASIC found average yearly premiums for people aged 80 to 84 were about four times those for people in their early 50s, so ask for the premium at every age before you sign.
What is the cheapest way to plan a funeral?
A direct cremation is usually the cheapest option: there's no service at the crematorium, and the ashes are returned to the family. You can prepay one with a funeral director, which Services Australia doesn't count in the assets test, and hold a memorial yourself. See our guide to no-service funerals.
Can funeral costs be paid from the deceased's bank account?
Usually, yes. Funeral costs are paid from the estate before other debts, and most banks will pay the funeral director's invoice from the deceased's account. Contact the bank's deceased estates team with the invoice. Keep in mind that whoever signs the funeral contract is personally responsible for the bill until it's paid.
Can I get my money back from a prepaid funeral?
Often not. For Services Australia to exempt a prepaid funeral from the assets test, the contract generally has to be non-refundable, except in limited cases such as moving out of the funeral director's area (Services Australia operational guidance). In Western Australia you get a 30-day cooling-off period. Read the cancellation terms before you sign.
Do I need to tell Centrelink about a funeral bond?
Yes. You must tell Services Australia about any funeral bond you own, even if you know it's exempt, including how much is invested and whether you own it alone or jointly. Let them know if you add money, buy another bond or a joint owner dies. You don't need to report the interest it earns.
Can I use my super to pay for a funeral?
If you're paying for the funeral of a dependant and can't otherwise afford it, you can apply to the ATO to release part of your own super on compassionate grounds. You'll need the funeral director's quote or unpaid invoice. Apply before you pay, as the ATO won't release super for costs you've already paid. The amount released is taxed as a super lump sum.