Exempt Funeral Investments (Funeral Bonds) 108-04080030

Check the managed Investments Summary (MIS) screen.

Is this an update to an existing funeral investment?

• Yes, see Table 3, Step 1
• No, go to Step 2

Note: for Manual Follow-up (MFU) reviews, see Customer First tab Table 3, Step 3

If the customer is making income and assets updates:

• for a new funeral insurance plan, go to Step 3
• for a new pre-paid funeral and/or funeral bond, go to Step 4
• for all other income and assets, see Coding income and assets for Centrelink payments and services

Check the contract or purchase document.

Does the insurance plan have a surrender or cashable value?

• Yes, refer to 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

If the customer advises of a new pre-paid funeral and/or funeral bond, check:

• if it is a gift or a purchase, and
• if purchased, check documents to verify this. For example, a bank statement showing the original purchase price

Go to Step 5.

Documents verifying the purchase of a pre-paid funeral or funeral bond/s must be requested, sighted and checked for compliance with the exempt asset policy.

A purchase contract outlining the terms of the investment and the original investment price is needed to determine if the funeral investment is an exempt asset.

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

Have all the required details been provided?

• Yes, see Table 2, Step 1
• No, do not start an activity, go to Step 6

• Tell the customer:
• all details of the new investment are needed before any change can be made, to make sure they get the correct entitlement
• the information they must provide
• record what has been asked for on a DOC
• request information using an RFI, see Requesting information (CLK)

Procedure ends here until documents are returned.

Documents verifying the purchase of a pre-paid funeral or cemetery plot must be provided and checked for compliance with the exempt asset policy.

The amount of an advance payment made by an income support recipient for themselves 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
• Nothing further needs to be done for funeral services to be provided in accordance with the contract
• 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.

Does the pre-paid funeral comply with the exempt asset policy?

• Yes, scan the documents and record details in a Note on the customer’s record. Procedure ends here
• No, assess the policy as a funeral investment. Go to Step 2

Documents verifying the original purchase price of a funeral bond/s must be provided and checked for compliance with the exempt asset policy.

Note: if the customer has a pre-paid funeral and a funeral bond, only the pre-paid funeral is exempt.

See Resources page for the current and historical Indexed Funeral Bond Allowable Limit (IFBAL) amounts.

Is the funeral bond investment exempt?

• Yes, go to Step 3
• No, go to Step 4

Two funeral bonds per customer may be exempt if the total cost is no more than the Indexed Funeral Bond Allowable Limit (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 is to be exempt
• 2 funeral bonds and the total purchase cost is more than the IFBAL, they must choose which of the 2 is to be exempt

Is the funeral investment to be coded as exempt?

• Yes, for coding a new funeral investment, see Managed investments - adding a new investment
• No, go to Step 4

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
• 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.

• 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 initiate 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 Managed investments - adding a new investment

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. Provided the original amount INVESTED by the customer does not exceed the IFBAL, the funeral investment remains exempt.

Updates should only be made if the customer has contributed extra funds to the original funeral investment.

Have additional funds been contributed by the customer?

• Yes,
• select Edit in the header details and update the item details
• Event Date: the date of the change
• Funeral exemption: select Yes if the investment remains an exempt funeral investment
• Rural Exemption Code: select ASS - Asset Value to be exempt if the customer is claiming a rural payment and the investment is exempt from the assets test. For example, if their superannuation is in the accumulation phase
• confirm the current dollar value with the customer and enter the amount in the Total Asset Value field in dollars and cents
• select Save
• update Receipt Date and Channel and select Save
• select Assess
• check the outcome on Entitlements (ELD) and 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
• No,
• do not code any increase in the value of an exempt funeral bond due to investment earnings only
• record the details on a DOC
• procedure ends here

Check the Managed Investments Summary (MIS) screen.

Is this an update to an existing funeral investment?

• Yes, see Table 3, Step 1
• No, go to Step 2

Note: for Manual Follow-up (MFU) reviews, see Table 3, Step 3

If the customer is making income and asset updates:

• for a new funeral insurance plan, go to Step 3
• for a new pre-paid funeral and/or funeral bond, go to Step 4
• for all other income and assets, see Coding income and assets for Centrelink payments and services

Check the contract or purchase document.

Does the insurance plan have a surrender or cashable value?

• Yes, refer to Table 4, Step 4 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

If the customer advises of a new pre-paid funeral and/or funeral bond, check:

• if it is a gift or a purchase, and
• if purchased, check documents to verify this. For example, a bank statement showing the original purchase price

Go to Step 5.

Documents verifying the purchase of a funeral bond/s must be requested, sighted and checked for compliance with the exempt asset policy.

Two funeral investments can be exempt if their total cost is not more than the Indexed Funeral Bond Allowable Limit (IFBAL). If they purchase an additional funeral investment, the customer may choose which one(s) to exempt.

A purchase contract outlining the terms of the investment and investment price is needed to determine if the funeral investment is an exempt asset.

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.

Have all the required details been provided?

• Yes, see Table 2, Step 1
• No, do not start an activity, go to Step 6

To make sure the customer gets their correct entitlement, all relevant information is needed before any changes are made.

• Tell the customer of all the information they must provide
• Record details of the contact and what has been asked for on a DOC
• Request forms and information using an RFI, see Requesting information (CLK)

Procedure ends here until documents are returned.

Documents verifying the purchase of a pre-paid funeral or cemetery plot must be provided and checked for compliance with the exempt asset policy.

The amount of an advance payment made by an income support recipient for themselves 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
• Nothing further needs to be done for funeral services to be provided in accordance with the contract
• 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.

Does the pre-paid funeral comply with the exempt asset policy?

• Yes, scan the documents and record details in a Note on the customer’s record. Procedure ends here
• No, assess the policy as a funeral investment. Go to Step 2

Documents verifying the purchase of a funeral bond/s must be provided and checked for compliance with the exempt asset policy.

Note: if the customer has a pre-paid funeral and a funeral bond, only the pre-paid funeral is exempt.

See Resources for the current and historical Indexed Funeral Bond Allowable Limit (IFBAL) amounts

Is the funeral investment exempt?

• Yes, go to Step 3
• No, go to Step 4

Two funeral bonds per customer may be exempt if the total cost is no more than the Indexed Funeral Bond Allowable Limit (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
• 2 funeral bonds and the total purchase cost is more than the IFBAL, they must choose which to exempt

If the investment is listed on the Managed Investment Product List (MIP) screen and/or Main Menu (MIMM) screen:

• check if the funeral investment is in the Managed Investments (MIN) database
• select the product and code the following fields:
• Inv Type: 'FB'
• Total Asset Value: cost price
  Note: the cost at time of purchase must have been equal to or less than the IFBAL. Disregard any increase in the value of an exempt funeral bond due to investment earnings only

Funeral Exempt: 'Y' If the investment is not listed on the MIP screen, code the funeral investment on the Unregistered superannuation and managed investments (MIUS) screen.

For more help with coding MI or MIUS screens, see Managed investments - updating existing investments.

Record details on a DOC.

Finalise the activity via the Assessment Result (AR) screen.

Are there also non-exempt funeral bonds?

• Yes, go to Step 4
• No, procedure ends here

If the funeral bond does not meet the exemption criteria, code and assess the investment as a managed investment.

If the investment is listed on the Managed Investment Product List (MIP) screen and/or Main Menu (MIMM) screen:

• check if the funeral investment is in the Managed Investments (MIN) database
• select the product and code the investment details on the MI screen
• not listed on the MIP screen, code the funeral investment on the Unregistered superannuation and managed investments (MIUS) screen

Ensure the following fields are coded as:

• Inv Type: 'FB'
• Total Asset Value: cost price
• Funeral Exempt: 'N'

For help with coding MI or MIUS screens, see Managed investments - updating existing investments.

Record details on a DOC.

Finalise the activity on Assessment Results (AR) screen.

Tell the customer the funeral investment will:

• be counted as an asset, and
• deeming rules will apply

See Resources page for further explanation of assets that are not exempt.

Procedure ends here.

Is the investment coded on the MIS screen?

• Yes, go to Step 2
• No, see Table 2, Step 1

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. Provided the original amount INVESTED by the customer does not exceed the IFBAL, the funeral investment remains exempt.

Note: if the customer advises the investment has increased due to interest paid and is now over the IFBAL, do not change the investment value.

Updates should only be made if the customer has contributed extra funds to the original funeral investment.

Have additional funds been contributed by the customer?

• Yes, select the relevant product and update the following:
• Asset value $:
• Funeral Exempt: If the total purchase price of the investment remains equal to or below the IFBAL, this field must be coded with 'Y'. If not, the field must be coded as 'N'
• Event Date:
• Source:
• DOR:
• Action:
• record the details on a DOC
• finalise the activity via the Assessment Result (AR) screen
• No,
• do not code any increase in the value of an exempt funeral bond due to investment earnings only
• record the details on a DOC

Are there also non-exempt funeral bonds?

• Yes, see Managed investments - updating existing investments
• No, procedure ends here

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 her until documents are returned.