The KeyInvest Funeral Bond is a capital guaranteed tax paid investment, designed to help meet funeral expenses. A Funeral Bond can be started with as little as $500 and you can make additional contributions via ad hoc lump sums or a regular savings plan (min $100 p.m.)
Taxation and pension benefits
A Funeral Bond also has other benefits including potentially significant taxation and pension benefits.
The potential pension benefits apply under current legislation that, up to $11,500 (indexed annually) is treated as an asset exempt from Centrelink's income test, assets test and deeming provisions. This can result in an increased pension entitlement.
Whether any tax is payable by the estate will depend on the estates taxable income in the year that benefits are paid and the estates marginal tax rate.
For couples it may be best to take out individual Funeral Bonds as both Investments will be exempt from the income and assets test. This can result in an increase of $33.75 per fortnight for the couple. You can hold up to two Funeral Bonds, individually or jointly, and still qualify as an exempt asset for centrelink purposes; however the combined original investment amount must not exceed $11,500.
Payment of Benefits
Benefits can be paid either to the estate or direct to a Funeral Director. Benefits can be paid quickly (normally within 10 working days) and there is no need to wait, for sometimes lengthy periods, for Grant of Probate. This can assist family in the quick payment of a funeral account - in some cases Funeral Directors may offer discounts for quick payment. Any surplus that remains after payment of the funeral account will be paid to the estate. A certified copy of the death certificate, legal will, funeral account or confirmation that the funeral service has been conducted may be required.
Advantages for using the KeyInvest Funeral Bond
- A capital guarantee covers the investment as well as any contributions and annual bonuses, once, allocated.
- No restrictions by health or age.
- No contributions restriction, however the investment should not exceed your anticipated funeral costs.
- Individual or joint ownership is permitted.
- Investments of up to $11,500 (indexed annually) will generally be treated as an asset exempt from Centrelink's Income and Asset Test.
- A tax paid investment.
The KeyInvest Funeral Bond fund is managed by Perennial Investment Partners on behalf of KeyInvest. For more information contact your Financial Adviser or KeyInvest on 1300 658 904. To download a copy of the Funeral Bond DS click here.