Of the many complaints levelled at the Australian Funeral Industry over the last 20 years or so, by far the largest from consumers and community groups have concerned the rising cost of funerals and how they are paid for.
The Cost of Funerals
Investigations by a number of organisations including the University of Wollongong (2017), Choice (2019) and Australian Seniors (2019) all found that the cost of a similar funeral varied widely from funeral home to funeral home, state to state and even region to region.
Most have reported that a cremation can cost anywhere between $5,000 and $8,000 (or more) with the highest being in NSW and Victoria with variations between metropolitan and rural areas.
Burials are more costly between $10,000 and $15,000 (or more) with NSW being the highest again.
They also report that the cost of funerals has been steadily rising more than the annual rise in cost of living. Funeral Director’s fees represent the largest proportion of the rises in cost. Lack of burial space and new investments into cemetery infrastructure has also accounted for the rise in the cost of burials.
The Financial Burden of Funerals
Funerals can place a huge financial burden on some families due to these high costs especially if there has been little planning beforehand or knowledge of where they can get help if they need it. All this adds extra stress for those left behind during an already emotionally draining time.
The most concerning aspect of the price rises has been the lack of transparency as to the breakdown of individual costs.
Professional fees can account for up to 39% of a total bill and coffins another 31%.
Pressure has been mounting over the years to address the lack of transparency and this appears to be happening now. So, it may definitely pay to shop around and get some recommendations from others.
And make sure you ask for an itemised quote before signing anything.
There are a number of ways to pay for and even plan ahead for a funeral. So let’s look at them one by one.
- Funeral costs are essentially estate expenses and banks are allowed to release funds from a person’s account even if it is frozen and awaiting probate.
Executors of an estate need to apply to a bank direct with documents including a-
– death certificate and
– will and an
– invoice or receipt from the funeral company.
- The idea of pre-paid funerals emerged in the late C20th promoted as a way of keeping costs at the time of taking out the plan thus potentially saving money. They also tied a person to a particular funeral home.
Like any contract, it is essential that any fine print needs to be clarified and it might also be sensible to get some advice before taking one out. What is most important is that the funds are going to be placed in a registered fund.
- Funeral insurance is exactly as it states: insurance.
If you take out funeral insurance you will be expected to continue paying into it until it is needed and the total amount paid in may exceed the payout depending on how long that is. If you stop paying premiums the policy will terminate so no funds will be payable. So, it is wise to give some thought to this too.
- There are a few ways to get government help to pay for a funeral.
If the deceased was receiving financial assistance from Veterans Affairs or Centrelink there are bereavement payments available so it is definitely something to check out.
- If the person died as a result of a motor vehicle accident in NSW it may be possible to have a funeral paid from a payout from the CTP (Compulsory Third Party) green slip insurance.
- For many, the safest and most easily available option for planning ahead might be to open a joint savings account (one that gives the most interest such as a bonus saver) with a potential executor of your will or at least someone you trust and put some money in regularly.
For more information on paying for a funeral, you can also check out the Moneysmart website.
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