Pensioners may get a $780 Centrelink boost through one bold move

As we age, we often find ourselves contemplating the inevitable.

While it may seem grim, planning for our final farewell can have some unexpected financial benefits.

For Australian pensioners, one strategy could not only provide peace of mind but also boost Centrelink payments.


With the rising funeral costs, pre-paying for one recently became an increasingly savvy move.

Recent figures from Australian Seniors showed that a basic burial could cost up to $18,652, and a basic cremation service could reach $5,953.

These are not small sums, and they're only expected to increase with time.

By pre-paying for your funeral, you can lock in today's prices, potentially saving thousands of dollars.


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Pre-paying for funerals is considered a bold yet financially smart move, as prices of funeral services continue to rise. Image Credit: Pexels/Pavel Danilyuk


Moreover, these pre-paid funeral costs are exempt from the Age Pension assets test, which could lead to significant increases in your pension payments.

'A pre-paid funeral is essentially a lump sum of money paid to a funeral director for a set outline of costs and services, and they are typically non-refundable,' financial adviser Alex Jamieson explained.

'Centrelink for the age pension says, "Look, we won't assess those as being assets anymore." So hypothetically, if someone pays $10,000 as a pre-paid funeral cost, that would reduce their assessable assets for the asset test assessment.'

This could potentially increase pension payouts by $780 a year or $30 per fortnight.


This increase in pension is akin to a return of 7.80 per cent on your money, which is currently more than what you'd typically earn from an average term deposit.

Over approximately 13 years, the extra pension money could effectively reimburse the money spent on the funeral.

This strategy is particularly beneficial for those receiving a part pension due to the assets test.

Single homeowners could have assets up to $686,250, and single non-homeowners up to $938,250 to qualify for a part pension.

For couples, the limits are $1,031,000 for homeowners and $1,283,000 for non-homeowners.

Pre-paying for a funeral could allow people to qualify for a pension.


Dipping below the asset test limit could also grant pensioners access to additional benefits, such as reduced costs for medications and utilities.

Aside from pre-paid funerals, other strategies like using gifting provisions, spending on holidays or home repairs, or investing in funeral bonds could exempt pensioners from asset tests up to $15,500.

While buying a car or other significant assets would not improve your Centrelink position, strategic spending could make a substantial difference.

While it may feel sad to plan for your funeral, it's a move that could provide financial relief and ensure that your final send-off is taken care of without burdening your loved ones.
Key Takeaways

  • Aussie pensioners could increase their Centrelink payments by pre-paying funerals, which are exempt from the Age Pension assets test.
  • Pre-paying a funeral could lock in cheaper costs, provide peace of mind, and result in a financial return on investment due to increased pension payments.
  • Pre-paid funerals could give pensioners a $780 boost in payouts or $30 fortnight.
  • Other ways to potentially improve Centrelink asset test positions included using gifting provisions, spending on holidays or house repairs, and considering funeral bonds within limits.
Have you considered pre-paying your funeral, or have you taken other steps to manage your assets in retirement? Share your stories and thoughts with us in the comments below.
 
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So now I'm expected to think about dying..no not doing that for anyone at this point in time..can we just live the rest of our lives in peace...this is a nightmare scenario..for those who do and want funeral insurance..all good and fine.. where do I get an extra 50.00 a month anyway..my pension 85% goes on rent..i didnt get 4000 from wa govt to help ..we all know we are reaching that point soon enough without thinking about it and I don't have 10,000 either..I'm not spending days concerning myself about click bait..or an offer that's completely using fear and emotional tactics to get more people to save the govt on cremation costs they pay for people who have nothing..this is just frustrating and wrong..and another govt save only..this is happening too often with the albanese government. .I already know someone's going to be peeved with this..personally don't care..
 
It would be far more helpful to do a story on managing your own funeral & investigating baskets instead of coffins YUK 🤢 How about some alternative funerals? Much cheaper & nicer for those that abhor the "normal" funerals 🙏
Woolworths, Coles and Aldi have baskets made from recycled plastic but I don't think they are for sale.

And a tad small as well. Better off getting a shopping trolley. Free of charge as they are abandoned all over metropolitan suburbs of Australia's major cities.
 
I agree with some of the previous "headline" arguments but also agree with the pre-planning importance of funeral preparation!
My wife and I have an appointment with a solicitor next Tuesday to update our 2003 wills and we will be discussing this very topic at that sitting!
To Flash I am glad you agree with me about the importance of having a pre paid funeral. I do not want to leave any worries to my son & his wife who have 3 beautiful girls to bring up the last girl just born on the 17th May. What a joy they are my 3 beautiful granddaughters; I get to see lots of photos as they live in another country.
 
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Hubby and I organized pre-paid funerals about 5 odd years ago because I didn't want our son to have the expense or responsibility and feel obliged to give us an unnecessary, expensive send off!
We opted to have the bare and mandatory basics for a cremation, with no service, total cost for the both of us, just over 5K or just under! The same pre-paid plan probably would be over 7k today and will keep going up, no doubt!!
As for the misleading Headers, well, I always read the article before I allow myself to get excited and I am not a paid member, so I reluctantly have to put up with the bloody ads and pop ups.
Have a nice weekend people, stay safe and roll on summer!!!
 
To Flash I am glad you agree with me about the importance of having a pre paid funeral. I do not want to leave any worries to my son & his wife who have 3 beautiful girls to bring up the last girl just born on the 17th May. What a joy they are my 3 beautiful granddaughters; I get to see lots of photos as they live in another country.
 
People are always saying the pension is for those who are in need. Well all I see is people wanting to stay under the pension cut off and getting welfare. Too bad self funded retirees cannot get the same benefits. What is wrong with opening an account and saving for this very sad rainy day?
 
Judy ABowser, your 3rd Granddaughter shares her birth date with me, what a lucky little girl she is 🥰
 
In the future when my husband and l are in a financial situation that we can do a prepaid funeral we will be doing so. I don't want our children to have the worry. Thirty years ago my in-laws passed away four months apart and bless them they had done prepaid funerals. As my husband and I were only in our early 30s at the time and also my husband is an only child so it fell on our shoulders more mine than his because he was in full blown grief. The fact mum and dad had done a prepaid funeral was a huge selfless blessing for us. All l had to do was write the eulogy for.both and arrange flowers I put on the the wake at our home.
It was a big help during a very sad time.
The less worry we have to
leave for our kids the better. Also the cost is over the top. I would think most families don't have thousands on hand to pay for unexpected funeral. Also l would not like to think the kids get ripped off thinking we have to give the oldies the most expensive coffin and all the bits that go with it.
The most important thing to me is your memories of your loved one not the send off you have.
Kind regards to all Vicki
I totally agree with you Vicki 100%.
 
When Mum shuffled on in September 2007, the additional "costs" on top of the "benefits" given by a certain funeral fund was jaw dropping. Over $2800 in excess of the contributions she diligently paid since the early 1960s. The following week, I ceased making contributions to the same funeral fund and it subsequently went out of business about 18 months latter.

Thieving bastards the lot of them!
 
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I am not having a funeral, rather a cadaver removal/disposal. No wakes,no service,no flowers. Don't want false tears either!

As for the mis-leading headings for these types of articles, i fully agree.
 
Many of these headlines are sensational, obviously to attract attention. As a medical practitioner I often see alarming headlines about killer diseases on this site, when the truth is most of them are rare, or are disease like measles that seniors would be immune to. Of course health warnings are useful if they encourage the general community to keep up their vaccinations, eg tetanus, which older people seldom get their 10 year boosters for, and of course flu and Covid vaccines. Regarding pre paid funerals, if you won't have money in your estate to cover it, it may be an option, however some of the insurance plans continue to cost for years, so you end up paying much more than you would for the funeral. There are also cheaper options like private cremations, with a memorial service held later, to save a lot of costs, or if you really want to save money, you can donate your body to medical research, which costs nothing!. I think many people would have money in their estates to pay for a funeral, and banks have to release this at the time. I'm thinking of cutting off from this group due to the sensationalism, however there are some interesting articles published here.
 
I think that this type of post should not be on this site, its becoming just like all the rest with just sensational statements that end up being unhelpful clik bait, I though you guys were above this sort of rubbish, I will block the site if it keeps happening
 
newspapers in the old days used to have dramatic headlines to "hook people into buying a newspaper. you dont have to do that (its just annoying) we are already users of your product, your just driving people away...we like your product, but we dont need "puffery) if no news, show more readers comments, you have a good product but dont spoil it with marketing tricks we aren't buying that , and please can you fix your crossword s im sick of your opposition s crossword ,..again you had the best crossword and now the worst...please dont ruin your product. we like it ! ps everything that the south Aust govt does ,rarely are of interest to anyone other than sth Aust...we hate being tricked
 
Dear Admin
We love your newsletters and really appreciate the work you all do,
However, kindly note that the title of ANY article should be the
shortest one-line summary exposing the most important parts of the article (not a riddle!)...as you don't want to ruin the highlight - unless, of course, it's a joke...as you don't want to ruin the punchline!
Many thanks
"The Old Fogies"

💋
 
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Thanks for the article. As you know, any prepayment incurs the risk of the Provider's business closing or claiming insolvency.
 
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