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Funeral bond

A funeral bond is a managed investment that will on maturity either offset or assist towards the payment of the funeral of the person or the person's partner. Up to two funeral bonds per person may be treated as exempt assets if the combined amounts invested is within the funeral bond threshold.

A funeral bond cannot be exempt if the person has a prepaid funeral.



An investment is a managed investment if:

  • the money or property invested is paid by the investor directly or indirectly to a body corporate or into a trust fund,
  • the assets that represent the money or property invested (the invested assets) are not held in the names of investors,
  • the investor does not have effective control over the management of the invested assets, and
  • the investor has a legally enforceable right to share in any distribution of income or profits derived from the invested assets.

For a full definition see also:

Sections 5J(1A), 5J(1B) and 5J(1C) of the VEA.



An exempt asset is one that is disregarded when calculating the value of a person's assets under the assets test.  Examples of exempt assets include:

For a full legislative definition see section 52 of the VEA.



The funeral bond threshold is an annually CPI indexed amount under section 59B of the VEA.  A person may have up to two funeral bonds treated as exempt assets.

A prepaid funeral is a funeral purchased in advance. The type and style of funeral is documented in a contract and the funeral is paid for at today's prices. There are no further costs to be paid regardless of when the funeral is required. A prepaid funeral is assessed as an exempt asset and no threshold or limit applies.



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