Funeral bonds and investments 108-04080030

This document outlines the assessment of funeral bonds and investments, including pre-paid funerals, cemetery/burial plots and funeral insurance.

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Information needed for assessing funeral bonds and investments

Coding funeral investments

Updating funeral investments/bonds

Information needed for assessing funeral bonds and investments

Table 1

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Step	Action
1	Type of funeral investment or product What type of funeral investment/product does the customer own? Funeral bond/s, go to Step 2 Pre-paid funerals or cemetery/burial plots, go to Step 4 Funeral insurance, go to Step 5 All other income and assets, see Coding income and assets for Centrelink payments and services Note: for Manual Follow-up (MFU) reviews, see Table 3, Step 6.
2	Customer contact Check the Managed Investments Summary (MIS) screen. Is this an update to an existing funeral bond? Yes, see Table 3 No, for a new funeral bond/s or coding for a new claim, go to Step 3
3	Documents provided Documents containing details of each funeral bond, including purchase price and date must be requested, sighted and checked for compliance with the exempt asset policy. Two funeral investments can be exempt if their total cost is equal to or less than the Indexed Funeral Bond Allowable Limit (IFBAL). If they purchase an additional funeral investment, the customer may choose which one(s) to exempt. If purchased by the customer and the purchase contract does not include the purchase price, a bank statement showing the purchase price must be provided. If customer is lodging a new claim and has an existing funeral bond, further steps are required to check if the customer has contributed any extra funds since purchasing. Have all the required details been provided? Yes, see Table 2 No, do not start an activity, go to Step 6
4	Purchase of a pre-paid funeral or cemetery burial plot Documents containing details of a pre-paid funeral or cemetery/burial plot must be requested, sighted and checked for compliance with the exempt asset policy. The amount of an advance payment made by an income support recipient for their or their partner's funeral service (a pre-paid funeral) is an exempt asset if all of the following apply: It is a contracted payment The contract sets out the services you have paid for and states there are no more costs to pay The payment cannot be refunded, unless the income support recipient moves outside the designated funeral service area There is no limit to the amount that an income support recipient may invest in a pre-paid funeral or pay for a cemetery or burial plot. Have all the required details been provided? Yes, and the pre-paid funeral or cemetery/burial plot: complies with the exempt asset policy, scan the documents, and record details in a DOC on the customer’s record. Procedure ends here does not comply with the exempt asset policy, go to Table 2, Step 3 No, do not start an activity, go to Step 6
5	Funeral insurance plan Check the contract or purchase document. Does the insurance plan have a surrender or cashable value? Yes, see Table 4, Step 4 on the Customer First tab in Coding income and assets for Centrelink payments and services No, there is no assessable asset value and no coding is required. Procedure ends here
6	Documents and information needed from customer Check the customer's record to see if a request for the return of documents has already been recorded. Contact the customer to advise: what information they need to provide all information is required before recording any change. This will make sure they receive correct payments Request the information and forms required and allow extra days for surface mail delivery Note what has been requested in a DOC Procedure ends here until documents are returned.

Coding funeral investments

Table 2

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Step	Action
1	Purchase of a funeral bond Documents containing details of each funeral bond, including purchase price and date must be requested, sighted and checked for compliance with the exempt asset policy. For existing bonds, consider any additional funds contributed by the customer since purchasing. Note: if the customer has a pre-paid funeral and a funeral bond, only the pre-paid funeral is exempt. Is the total amount contributed by the customer since purchased (not including investment earnings and bonuses) equal to or less than the IFBAL? Yes, the funeral bond is exempt, go to Step 2 No, the funeral bond is non-exempt, go to Step 3 See Resources page for the current and historical Indexed Funeral Bond Allowable Limit (IFBAL) amounts.
2	Coding an exempt funeral bond Two funeral bonds per customer may be exempt if the total cost and any extra contributions made by the customer (not including investment earnings and bonuses) is equal to or less than the IFBAL at the time of purchase. Each funeral bond is coded separately. Note: check the MIS screen to ensure that the funeral investment has not already been coded. If a customer owns: more than 2 funeral bonds, they must choose which funeral bond/s to exempt (this may be the one of greater value under the IFBAL) 2 funeral bonds and the total purchase cost and any extra contributions made by the customer (not including investment earnings and bonuses) is more than the IFBAL, they must choose which to exempt Is the funeral investment to be coded as exempt? Yes, code Funeral exempt field: ‘Y’. For coding a new funeral investment, see Managed investments - adding a new investment No, go to Step 3
3	Coding a new non-exempt funeral bond or investment If the funeral bond does not meet the exemption criteria: the investment must be coded and assessed as a managed investment. For help with coding Managed Investment (MI) or Unregistered Superannuation and Managed Investments (MIUS) screen, see Managed investments - adding a new investment code Funeral Exempt field: ‘N’ this step also applies for pre-paid funeral and cemetery/burial plots that do not meet the exemption criteria tell the customer the funeral investment will be counted as an asset, and deeming rules will apply See Resources for further explanation of assets that are not exempt. Procedure ends here.

Updating funeral investments

Table 3

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Step	Action
1	Existing funeral investment coded Is the investment coded on the MIS screen? Yes, go to Step 2 No, see Table 2
2	Check for additional contributions Funeral investments pay interest so the total investment may be worth more than the Indexed Funeral Bond Allowable Limit (IFBAL) due to accumulated interest payments or bonuses. Provided the original amount Invested by the customer is equal to or less than the IFBAL, the funeral investment remains exempt. Has the customer contributed additional funds since the funeral bond was first purchased? Yes, go to Step 3 No: do not code any increase in the value of an exempt funeral bond due to investment earnings or bonuses only record the details on a DOC procedure ends here
3	Check funeral bond exemption status For the investment to remain exempt the total contributions paid by the customer (purchase amount plus any extra funds contributed but not including investment earnings or bonuses), must be equal to or less than the IFBAL. See Resources page for IFBAL amounts. Is the total equal to or less than the IFBAL? Yes, the product remains exempt, go to Step 4 No, the product is no longer exempt, go to Step 5
4	Updating an exempt funeral investment Update for products that remain exempt: Asset value $: code the total contribution paid by the customer (purchase amount plus any extra funds contributed but not including investment earnings or bonuses) Funeral exempt: Y Event date: the date of the change Rural exemption code: leave blank Source: DOR: Action: record the details in a DOC finalise the activity on the Assessment Result (AR) screen
5	Updating a non-exempt funeral investment Update for products that no longer meet the exempt criteria: Asset value $ code the total contribution paid by the customer (purchase amount plus any extra funds contributed but not including investment earnings or bonuses) Funeral exempt: N Event date: the date of the change Rural exemption code: leave blank unless the customer is claiming a rural payment. Select: ASS - if investment is exempt from the assets test. For example, superannuation fund is in the accumulation phase BTH - if both asset and deemed income are exempt NOT - if neither asset value nor deemed income is exempt Source: DOR: Action: record the details in a DOC finalise the activity on the Assessment Result (AR) screen
6	Manual Follow-up (MFU) reviews If a funeral bond investment is not currently recorded as exempt, from 1 July 2024, triggers will be run to determine if it is able to be automatically exempt. In some circumstances, an MFU is created and will display on a customer’s record in Customer First. Contact must be made with the customer to confirm which of the funeral bonds they would like exempt, as the funeral bond may no longer exceed the IFBAL as a result of 1 July indexation. MFU activities for funeral bond exemptions display on the Activity List (AL) screen with notes Funeral Bond exemption decision required and keywords FBONDCPI and I011MI. On 1 July, an MFU activity is created on all customer records that have: more than one funeral bond which individually fall under the IFBAL, and the combined value exceeds the IFBAL When actioning the review: make genuine attempts to contact the customer confirm with the customer which of the funeral bonds they would like to be exempt ensure the funeral bonds have not been duplicated select the MFU if the customer requests a change to the funeral bonds, and the customer meets the exemption criteria, see Managed investments - adding a new investment Event Date: is the date the MFU review activity is being completed finalise the MFU If contact is unsuccessful, send a request for information, see Requesting information (CLK). Procedure ends here until documents are returned.

Step	Action
1	Type of funeral investment or product What type of funeral investment/product does the customer own? Funeral bond/s, go to Step 2 Pre-paid funerals or cemetery/burial plots, go to Step 4 Funeral insurance, go to Step 5 All other income and assets, see Coding income and assets for Centrelink payments and services Note: for Manual Follow-up (MFU) reviews, see Customer First tab Table 3, Step 6.
2	Customer contact Check the Managed Investments Summary (MIS) screen. Is this an update to an existing funeral bond? Yes, see Table 3 No, for a new funeral bond/s or coding for a new claim, go to Step 3
3	Documents provided Documents containing details of each funeral bond, including purchase price and date must be requested, sighted and checked for compliance with the exempt asset policy. Two funeral investments can be exempt if their total cost is equal to or less than the Indexed Funeral Bond Allowable Limit (IFBAL). If they purchase an additional funeral investment, the customer may choose which one(s) to exempt. If purchased by the customer and the purchase contract does not include the purchase price, a bank statement showing the purchase price must be provided. If customer is lodging a new claim and has an existing funeral bond, further steps are required to check if the customer has contributed any extra funds since purchasing. Have all the required details been provided? Yes, see Table 2 No, do not start an activity, go to Step 6
4	A pre-paid funeral or cemetery burial plot Documents containing details of a pre-paid funeral or cemetery/burial plot must be requested, sighted and checked for compliance with the exempt asset policy. The amount of an advance payment made by an income support recipient for their or their partner's funeral service (a pre-paid funeral) is an exempt asset if all of the following apply: It is a contracted payment The contract sets out the services you have paid for and states there are no more costs to pay The payment cannot be refunded, unless the income support recipient moves outside the designated funeral service area There is no limit to the amount that an income support recipient may invest in a pre-paid funeral or pay for a cemetery or burial plot. Have all the required details been provided? Yes, and the pre-paid funeral or cemetery/burial plot: complies with the exempt asset policy, scan the documents, and record details in a Note on the customer’s record. Procedure ends here does not comply with the exempt asset policy, see Table 2, Step 3 No, do not start an activity, go to Step 6
5	Funeral insurance plan Check the contract or purchase document. Does the insurance plan have a surrender or cashable value? Yes, see Table 4, Step 4 on the Process Direct tab in Coding income and assets for Centrelink payments and services No, there is no assessable asset value and no coding is required. Procedure ends here
6	Documents and information needed from customer Check the customer's record to see if a request for the return of documents has already been recorded. Contact the customer to advise: what information they need to provide all information is required before recording any change. This will make sure they receive correct payments Request the information and forms required and allow extra days for surface mail delivery Note what has been requested in a DOC Procedure ends here until documents are returned.

Step	Action
1	Existing funeral investment coded Access the Customer Summary Use the Super Key to go to the screens list Key START and select Income and Assets Update from the task selector Select Investments Summary from the task selector options Select Start to start the Change of Circumstance flow The Investments Summary (MIS) screen displays Expand the Managed Investments (MIP) and unregistered Managed Investments (MIUS) sections Is the investment coded on the MIS screen? Yes, go to Step 2 No, see Table 2
2	Check for additional contributions Funeral investments pay interest so the total investment may be worth more than the Indexed Funeral Bond Allowable Limit (IFBAL) due to accumulated interest payments or bonuses. Provided the original amount Invested by the customer is equal to or less than the IFBAL, the funeral investment remains exempt. Has the customer contributed additional funds since the funeral bond was first purchased? Yes, go to Step 3 No: do not code any increase in the value of an exempt funeral bond due to investment earnings or bonuses only record the details on a DOC procedure ends here
3	Check funeral bond exemption status For the investment to remain exempt the total contributions paid by the customer (purchase amount plus any extra funds contributed but not including investment earnings or bonuses), must be equal to or less than the IFBAL. See Resources page for IFBAL amounts. Is the total equal to or less than the IFBAL? Yes, the product remains exempt, go to Step 4 No, the product is no longer exempt, go to Step 5
4	Updating an exempt funeral investment Update for products that remain exempt: select Edit in the header details and update the item details Event Date: the date of the change Funeral exemption: select Yes Rural Exemption Code: leave blank Total Asset Value: key the total contribution paid by the customer (purchase amount plus any extra funds contributed but not including investment earnings or bonuses) select Save update Receipt Date, Channel and Service Reason (if the system does not select a default Service Reason, select the most relevant Service Reason for the update) select Save select Assess check the outcome on Entitlements (ELD) select Finish finalisation Notes pre-fill with details of the income and assets update. Record any extra details select Finalise to complete the transaction. Notes from the update will copy to Document List (DL) in all systems
5	Updating a non-exempt funeral investment Update for products that no longer meet the exempt criteria: select Edit in the header details and update the item details Event Date: the date of the change Funeral exemption: select No Rural exemption code: leave blank unless the customer is claiming a rural payment. Select: ASS - if investment is exempt from the assets test. For example, superannuation fund is in the accumulation phase BTH - if both asset and deemed income are exempt NOT - if neither asset value nor deemed income is exempt Total Asset Value: key the total contribution paid by the customer (purchase amount plus any extra funds contributed but not including investment earnings or bonuses) select Save update Receipt Date, Channel and Service Reason (if the system does not select a default Service Reason, select the most relevant Service Reason for the update) select Save select Assess check the outcome on Entitlements (ELD) select Finish finalisation Notes pre-fill with details of the income and assets update. Record any extra details select Finalise to complete the transaction. Notes from the update will copy to Document List (DL) in all systems Tell the customer the funeral investment will be counted as an asset and deeming rules will apply See the Resources page for further explanation of assets that are not exempt. Procedure ends here.

Operational Information

Funeral bonds and investments 108-04080030

Process Direct

Information needed for assessing funeral bonds and investments

Coding funeral investments

Updating funeral investments

Customer First

Information needed for assessing funeral bonds and investments

Coding funeral investments

Updating funeral investments