Funeral costs for pensioners: how Centrelink can help.

Funeral costs for pensioners: how Centrelink can help.

The death of a husband, wife or spouse is an extremely painful and difficult experience in itself. But the financial impact of funeral costs and other expenses on pensioners can add a lot of pressure, especially for those who rely on Centrelink benefits.

The Cost of Death report released by Seniors Australia shows that nearly a third (32%) of Australian families are in financial trouble after paying for a funeral, and it takes them at least six months to pay off their debts.

Retirees who have lost a partner may be eligible for government assistance through bereavement and superannuation. Centrelink lump sum payments can also help retirees with funeral costs.

Impact on pensioners paying for funerals.

Firstly, funerals are expensive. According to Finder, the average funeral for an Australian is around $7,848.

When a loved one dies unexpectedly, families often feel pressured to arrange a funeral at short notice. In an effort to arrange a funeral as quickly as possible, people often default to what has been done for generations – and it’s expensive. But is that right for your loved one?

Historically, the industry has made money by selling grieving families fancy coffins, expensive catering packages and other things they don’t necessarily need. Families are often ashamed to try to reduce funeral costs, despite one in three Australians experiencing financial hardship in the months after paying for a funeral. But why burden the most vulnerable citizens with such a huge expense?

While it can be a heartbreaking time, take the time to weigh up your options and consider what your loved one really wants from a funeral. Is an expensive funeral really worth the financial hardship if you can’t afford it?

How to pay for a loved one's funeral.

Once you have decided on a funeral and made arrangements with a funeral provider, you will have several different payment options available.

If the deceased had a prepaid funeral plan, funeral bond or funeral insurance, this could cover most or all of the funeral costs. Otherwise, there may be a range of Centrelink benefits available to help pensioners pay for funeral costs. These are explained further below.

Pensioners may be eligible for Centrelink Bereavement Payment and other government assistance.

The Australian Federal Government provides a range of grants, financial support and other services to help with the death of a loved one. These are managed by the Department of Human Services. The type and amount of bereavement payment you receive depends on your personal circumstances, your relationship to the person who has died and when you notify Centrelink that the person has died.

You can do this by calling Centrelink on 132 300 or by completing the Services Australia Death Notification form (available here). Centrelink will then share the information with Medicare.

Superannuation Bonus Bereavement Payment – ​​If a Superannuation Bonus Scheme member was unsuccessful in claiming the Superannuation and Superannuation Bonus before they died, their surviving partner may receive a one-off payment.

Carer Allowance – If you provided additional day-to-day care for the deceased person, you may be entitled to a further 14 weeks of pension after their death as a lump sum.

Widow's Benefit - New applications for Widow's Benefit ended in July 2018, however, if you are eligible you can apply for other benefits such as Jobseeker's Allowance or the Age Pension.

Bereavement Benefit - This pension ended on 20 March 2020. It is a short-term income support payment to help recently widowed people adjust to life after the death of their partner. If your partner has recently died, you may be able to get other bereavement support from the list above.

Please note: Centrelink entitlements may change at any time without notice, so you should contact your nearest Centrelink office for more information on 132 300.

How pension payments stop on death

When a pensioner dies, their government benefits stop once Centrelink is notified (phone 132 300).

When a single pensioner dies, their regular benefits will be paid to their estate until the date of their death. Their benefits will stop on the date of their death.

Other benefits and funds to help with funeral costs for pensioners.

You may also be eligible for benefits through the Department of Veterans Affairs, insurance companies, some private health funds and unions. Find out if these apply to you.

Department of Veterans Affairs.

If you are the spouse, dependant or carer of a deceased person who was receiving a bereavement benefit from the Department of Veterans Affairs, you may be eligible for a bereavement benefit. Usually the benefit is a lump sum payment up to $2,000. In addition to the veteran's funeral benefit, the Department of Veterans Affairs can assist with war widow partner benefits and other benefits.

If your loved one is a veteran and you think you may be eligible, you must notify the DVA as soon as possible after your loved one's death by visiting the DVA website or calling 1800 VETERAN (1800 838 372). You may also want to read our article: How to plan a veteran's funeral.

Release your super early.

You usually cannot collect a pension until you reach retention age. However, in certain circumstances, the law allows you to access your superannuation early. These limited circumstances include specific compassionate grounds and severe financial hardship. Paying for funeral expenses may be a time when you can access your funds if you meet certain conditions.

For more information on early access to your superannuation due to severe financial hardship, contact your superannuation fund. Alternatively, there are organisations that can assist you with making these claims. Supercare is one example.

State funeral assistance

Some states in Australia have state assistance programs that families can take advantage of. You need to meet strict criteria to be unable to pay for a funeral. Please contact each state agency for the specific requirements of each program.

Victorian funeral assistance

The not-for-profit funeral charity Bereavement Assistance provides decent funeral services to low-income Victorians with limited or no funds who would otherwise have to pay for a state-funded pauper funeral.

Queensland funeral assistance

In Queensland, if you are unable to pay for a funeral, you can apply to the Queensland Magistrates Court or the Queensland Coroner's Court for funeral assistance. To qualify, you must confirm that no other family members can pay for the funeral.

New South Wales funeral assistance

New South Wales provides pauper funerals for those who cannot afford a funeral and whose friends and family are unable to pay for a funeral. The service will be a basic cremation unless the deceased's next of kin requests a burial. This service is managed by the New South Wales Department of Health.

Funeral Assistance in South Australia

South Australian residents who are unable to pay for a funeral and have exhausted all other options may be eligible to arrange a funeral through Funeral Assistance in South Australia.

Funeral Assistance in Western Australia

The Bereavement Assistance Program provides assistance to people who are unable to pay for a funeral. Applicants must also prove that their family cannot afford the funeral.

Funeral Assistance in Tasmania

In Tasmania, the Department of Health and Human Services administers publicly funded direct cremations. The Basic Care Funeral Policy can arrange funerals and pay for people whose estates and relatives cannot afford funerals.

Funeral Assistance in the Northern Territory

In the Northern Territory, you can apply for funeral services from the Indigent Funeral Scheme. If the estate cannot pay for a funeral and the family of the deceased cannot contribute, the Public Trustee can apply to the Coroner's Office for financial assistance from the scheme.

There are also funeral grants for Aboriginal people. Both the Northern Land Council and the Central Land Council have programs that provide funeral grants to eligible Aboriginal people.

GoFundMe and other crowdfunding agencies to pay for funerals

This option may seem a little unconventional, but crowdfunding is used for many different purposes these days. There are always generous people willing to lend a hand when needed. Crowdfunding requests can be set up online through sites such as My Cause and Go Fund Me to help pensioners with funeral costs.