Are funeral costs included in death benefits claims?

Published 17 Jan 2018

The death of a loved one is devastating, and dealing with this loss is usually even more difficult when someone passes away suddenly.

Organising a funeral at such an emotional time is challenging, and families may struggle to pay for the service. This is hardly surprising when funerals can cost anywhere from $4,000 for a basic cremation up to $15,000 for an elaborate burial, according to MoneySmart figures.

However, when someone dies in NSW, their accumulated superannuation is passed on to chosen beneficiaries or is included in their estate. It is therefore common for loved ones to pay for the funeral out of these payments, which are known as super death benefits.

But what if there isn’t enough money to cover funeral arrangements? Or beneficiaries opt not to pay for the service? Let’s take a look at other options that are available.

Early release of your super

Anyone who is worried about leaving family or friends with funeral costs after they pass away should consider gaining early access to their superannuation in order to organise the service in advance.

Not everyone can get hold of retirement savings early, though. The Department of Human Services usually only releases the money on compassionate grounds, such as for people suffering from a terminal illness.

You must provide proof that you or your loved one has less than two years left to live and requires palliative care. Any money that is released can be used for funeral costs.

Alternatively, surviving partners or guardians can access their own super after a loved one’s death to pay for a funeral. A death certificate and a letter from the deceased’s doctor confirming their passing will be required.

Workers compensation payments

If an employee is killed in a workplace incident, the employer’s insurer may pay funeral expenses, as well as provide other financial support to surviving dependants.

According to the State Insurance Regulatory Authority, the insurer will pay a maximum of $15,000 for the funeral, including costs for:

  • The service (including burials and cremations);
  • Coffins;
  • Mourning vehicles;
  • Cemetery sites;
  • Obituaries and other newspaper notices;
  • Flowers; and
  • The death certificate.

Insurers may also offer money for the transportation of your loved one’s body.

Are you still unsure whether you are entitled to funeral costs through a superannuation policy or a death benefits claim? Contact Gerard Malouf & Partners Superannuation Lawyers for a free consultation today.

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