DATE OF ISSUE: 14 NOVEMBER 1990
FUNERAL BONDS - EXEMPTION UNDER INCOME AND ASSETS TEST
INTRODUCTION
The purpose of this instruction is to advise of an interim policy to be applied when assessing the impact of Funeral Bonds under the income and assets tests pending formal legislative amendments.
BACKGROUND
2.Current legislation limits exemption under the assets test to pre-paid funerals s50(1)(a)(viii). Due to a range of new products coming onto the market, the Department of Social Security (DSS) has sought to extend the exemption to certain of these products under both the income and asset test.
3.We understand that DSS amending legislation will now be put forward in the Autumn 1991 sittings. The Repatriation Commission has recently approved similar amendments for the VEA for the same sitting.
4.The Department of Social Security has authorised its staff to exempt certain products that fit a specified criteria. To ensure that veterans are not disadvantaged DVA will apply the same exemptions as DSS.
CHANGES
5.The criteria to be applied to exemptions are:
.Contributions for any one person must not exceed $5,000 in total. A married couple with a joint bond can contribute $5,000 jointly. If individual bonds are purchased, then $5,000 each can be contributed.
.Thebond must be in the name of the individuals and must be clearly identified on the contract as being for the sole purpose of paying for the funeral costs.
.The bond must not be able to be surrendered or transferred by the person during his or her lifetime.
6.It will be necessary for IPO's to liaise with DSS to ensure a consistent approach is maintained.
PETER HAWKER
NATIONAL PROGRAM DIRECTOR (BENEFITS)