Prepaid funeral expenses

A pre-paid funeral trust fund or account, is money put aside (usually in a trust) exclusively for the payment of funeral expenses.

If the money can be accessed by the client and used for other purposes, it is not considered exclusively for funeral expenses and this money is included as an assessable asset for Income Related Rent.

It is usually clear whether or not the trust fund or account has been genuinely set aside for funeral expenses.

Evidence that it has been set aside exclusively for funeral expenses include:

• the trust fund or account is only paid out on production of a death certificate
• the client cannot usually access the funds
• if a client can access the fund, there are limited conditions on withdrawal, such as re-locating overseas
• the trust fund or account is only payable to the funeral director or administrator of the client's estate
• the client cannot generally access the interest earned from the trust fund or account

Where the trust fund or account has been set aside for funeral expenses and cannot be accessed or converted into cash, then this money is not considered to be an assessable asset for Income Related Rent.