Paying for the funeral

​Who pays for the funeral?

The person who arranges the funeral usually has to sign a contract with the funeral director. The person who signed the contract is legally responsible to pay for the funeral. If there is enough money in the estate, the person arranging the funeral may be able to recover these costs from the estate.

Before you arrange the funeral, you should check if the deceased held a funeral plan, funeral insurance fund or life insurance policy to pay for the funeral. You may need to ask family members of the deceased if they know the details and even enquire directly with the funds or insurance provider to find out if the deceased held an account or policy.

If there is no funeral fund, insurance policy or money in the deceased's bank accounts and the deceased had no other property, you may not be able to recover the funeral expenses from the estate. You should consider this when deciding what arrangements to make.

Getting funds released from financial institutions

The bank may release some funds from the deceased's bank account to pay for the funeral. You will need to contact the deceased's bank and provide your identification to confirm your relationship to the deceased. The bank may also require you to complete documents, provide a copy of the death certificate, the deceased's will or an invoice from the funeral director, before they will release any money.

  Legal action can be taken against you by the estate if the bank releases some funds for the funeral and you do not use the funds to pay for the funeral.

 You should get legal advice about any documents that you are required to sign.

Funeral plans

As an executor or next of kin it is important that you check if the deceased had a funeral insurance plan.

Some people pay for their own funeral before they die. This is called a 'funeral plan'. There are different types of funeral plans, such as: 

• Pre-paid funeral 
• Funeral bond 
• Funeral insurance

Pre-paid funeral

A pre-paid funeral is where a person plans their own funeral and pays for it with a funeral director of their choice. The funeral plan is a written contract which includes details of how the funeral will take place. The money is held in a funeral fund registered with NSW Department of Fair Trading. The money is paid directly to the funeral director after the funeral.

Funeral bond

A funeral bond is money invested by a person to pay for their own funeral. To pay for the bond, you usually pay a deposit then regular monthly instalments. There is a maximum contribution limit on funeral bonds. The current funeral bond limit is $14,000 (as at 1 July 2022). The bond can only be paid out after the person dies and the payout will be the value of the investment at the time.

Funeral insurance

Funeral insurance involves a person making regular payments, called a 'premium, to an insurer. After the person dies the insurer pays a set amount of money to a nominated beneficiary. The beneficiary may then use this money to pay for the funeral.

For more information about different types of funeral plans, go to the NSW Department of Fair Trading website. 

For information on funeral plans and paying for funerals for Aboriginal and Torres Strait Islander people, go to the ASIC website.

 If you have a problem with a funeral director or insurance company, you should get legal advice.

Funeral directors

A funeral director is a professional who can carry out the funeral for a set fee. A funeral director can help with: 

• applying for a death certificate from Births, Deaths & Marriages NSW 
• supplying the coffin or casket 
• preparing the body 
• making arrangements for the purchase of a burial plot from a cemetery 
• making arrangements for cremation at a crematorium 
• making arrangements for the service, including flowers and music 
• transporting the body 
• placing notices in the newspaper 
• providing a crematorium or graveside service.

Before you instruct a funeral director, you should discuss and confirm the costs. Most funeral directors can hold a basic funeral for a minimal fee. Make sure you carefully read and understand the terms and conditions of the contract before you sign it. You may need to enter into a payment plan with the funeral director, if necessary.

The funeral director will issue the account directly to the person who arranged the funeral. You should not make funeral arrangements if you cannot afford to pay for the funeral or if there is not enough money in the deceased's estate to pay for a funeral.

 If you can't afford to pay the funeral invoice, you should get legal advice.

Purchased plots

A person may purchase a burial plot from a cemetery before they die. The person does not legally own the burial plot. The purchaser of the burial plot, called the 'licence holder', purchases the right to be buried in the plot and may be able to nominate another person to also be buried in the same plot.

There are restrictions on the number of people that can be buried in a single plot and you should check with the cemetery before making any arrangements for burial. When the licence holder dies, the purchased plot becomes part of their estate. If there is no will, the next of kin becomes the holder of the burial licence.

A burial licence may be transferred to another person with the permission of the cemetery. You must contact the cemetery to find out their requirements to transfer the burial licence.

 If there is a dispute about a burial plot, you should get legal advice.

When there is no money for a funeral

If a person has no money or assets they are called 'destitute'. If a destitute person dies and there is no money to pay for a funeral, the government may pay for a funeral. This is called a 'destitute funeral.'

If the destitute person died in a Public Health Facility, like a hospital or nursing home, a social worker will usually contact relatives to ask whether they can arrange the funeral. The social worker may also ask police to assist with contacting relatives. If there is no relative willing to pay for the funeral, the social worker will usually arrange the funeral.

If the destitute person died outside hospital, their treating doctor and the police should be informed. The police can determine whether the person is destitute and will notify the Public Health Unit. An officer from the Public Health Unit will arrange the funeral.

Where a person's death is being investigated by the coroner, the coroner will ask the police to assist with determining whether the person is destitute and then will notify the Public Health Unit. An officer from the Public Health Unit will arrange the funeral.

The cost of a destitute funeral is paid by the Area Health Service and is a basic funeral service. The Area Health Service will contact the deceased's next of kin to let them know about the funeral arrangements so that relatives and friends can attend.

The deceased is usually cremated unless the deceased's next of kin or relatives refuse cremation. If the deceased is cremated, the next of kin is entitled to have the ashes of the deceased. If the deceased's next of kin requests a burial instead of cremation, the deceased will be buried in a common grave. The grave site is identified by a number with no other headstone.

 If there is a dispute about the ashes of the deceased, you should get legal advice.

Other financial assistance

You may seek financial assistance from the following institutions:

• Centrelink offers bereavement payments to the spouse or carer of the deceased. For more information on how to apply and eligibility, go to the Centrelink website. 
• Department of Veterans' Affairs offers a lump sum bereavement payment to the surviving partner of a veteran who received a service pension. For more information, go to the Department of Veterans' Affairs website. 
• The Aboriginal Land Council offers grants to assist Aboriginal and Torres Strait Islander people with paying for the funeral. For more information, go to the ALC website. 
• Charitable organisations such as St Vincent de Paul, Anglicare and the Salvation Army may also be able to provide some assistance. ​