Cremation Costs

The subject of death is not one you would choose to discuss around the dinner table, let alone the cost of funerals in NZ. Whether looking at the price of burial or cremation, there are many different factors to consider. You will also come across the work and income New Zealand funeral grant, otherwise known as the WINZ funeral grant, which can help with funeral costs.

Who pays for your funeral?

In a perfect world, we would all have the necessary funds available or insurance to cover the cost of our funeral. However, at a difficult time, your family and friends will be grieving, and the added pressure of funding a funeral can often be too much to take. So before we look at the costs of funerals in NZ, we will take a look at the different ways in which the cost can be covered.

Savings

Many people try to put away a little extra each month in the hope of covering their funeral, any other expenses and to leave gifts for friends and family on their passing. But, unfortunately, as the cost of living continues to rise and spare funds are often scarce, this is not always possible.

Insurance policy

Life insurance is another popular way of ensuring your cremation/burial costs will be covered on your death. If this is a path down which you decide to go, it is essential to review the cost regularly. You may need to adjust your insurance policy which may mean higher premiums.

Funeral plan

Over the years, we have seen growing demand for funeral plans. These plans, similar to insurance policies, allow you to pay off the cost of your funeral each month. However, the funds are kept separately from the companies offering this service, as a means of protecting your capital, with the cost of funeral services often capped.

Funeral loans

There will be occasions where individuals have no savings, assets or insurance policies to cover the cost of their cremation. In addition, while the executors of the deceased estate are often responsible for funding the cost of cremation, funds may not always be available. Consequently, we have seen an increase in demand for funeral loans which can be supplementary to additional assistance from the likes of WINZ.

Upon the death of an individual, it can take some time for the deceased’s estate to be settled and funds released. Consequently, many will choose a short-term funeral loan as a means of bridging this gap before paying off the loan when the estate has been settled.

State assistance

As we will cover later in this article, there is state assistance available for those with limited or no funds to cover the cost of cremation. The WINZ funeral grant is designed to help those struggling financially. There are various criteria, and the total cost of cremation and funeral will not be included, but it does offer valuable assistance.

Cost of funerals in NZ

While we have seen numerous attempts to control the ever-rising cost of cremations and funerals, this is often to no avail. Many people are now forced to consider a no-frills funeral, giving them the dignity of a cremation but no traditional celebration of their life. We will now look at the cost of funerals in NZ, including cremation, burial, and additional expenses.

Cremation

When you consider that a no-frills cremation will still cost you around $4000, this put everything into perspective. If you require a funeral on top of the cremation, you could be looking at more than $10,000. While a lot of people will struggle to afford a full funeral, many feel it is the only option when looking to pay respects to family and friends.

Burial

The cost of a burial in New Zealand is even greater because you will need to acquire a cemetery plot from the local authority. The cost of single and double plots will be upwards of $2000, dependent upon the local authority. When you consider the additional costs associated with a traditional funeral, you could be looking at $15,000 upwards.

Additional expenses

Only when you sit down to research the additional expenses associated with a traditional funeral, do you begin to understand the cost entirely. Other fees will include:-

• Transport for mourners
• Catering
• Room hire
• Flowers
• Obituary
• Chapel of rest
• Urn/casket
• Crematorium/church

This is just an example of some of the expenses associated with the cost of funerals in NZ. Of course, there are base expenses such as the cremation cost, but for many, it is the additional extras they find difficult to fund.

WINZ funeral grant

The work and income department (WINZ) offers a funeral grant system to help with funeral costs when someone dies. While there are several aspects to consider and conditions that need to be met, the WINZ funeral grant is an invaluable service.

Eligibility for a WINZ funeral grant

You may be eligible for a funeral grant when someone dies if you are:-

• A partner
• Child
• Parent/guardian (for those over 18)

Unfortunately, some people will die with no family to organise their cremation. Consequently, if you are not family but arranging a funeral on behalf of someone aged 18 or over, you may be eligible for financial assistance.

Income restrictions

There are income restrictions when looking to cover the cost of cremation or burial via the WINZ funeral grant system. If you are the deceased person’s partner you will only be eligible if you have annual income below the following thresholds:-

Individual

16 to 17 years of age with no children – Annual income before tax $26,749.32
18+ years with no children – Annual income before tax $30,742.40
A parent with one child – Annual income before tax $37,304.80
A parent with two or more children – Annual income before tax $39,302.64

The income threshold for a deceased person’s parent/guardian is as follows:-

Individual

Single, 16 to 17 years with no other children – Annual income before tax $26,749.32
Single, 18+ years with no other children – Annual income before tax $30,742.40
Married, in a civil union or de facto relationship, with or without children – Annual income before tax $44,653.44
Single with one other child – Annual income before tax $37,304.80
Single with two or more other children – Annual income before tax $39,302.64

Unless your income is below the appropriate threshold, it is unlikely that you will qualify for a WINZ funeral grant.

Asset limits

The eligibility factor will also include the assets of the deceased person and their partner, parent or guardian. Thankfully, there are several personal and family assets that will not be included when assessing eligibility.

The authorities will then compare the value of assets available to the total funeral expenses. Traditional expenses with this system take into account:-

• Casket
• Public notice
• Hearse fees
• Burial plot
• Cremation fees
• Professional undertaker services

This information is used to calculate the amount of funding provided by the WINZ funeral grant. The maximum grant is $2152.66, less certain assets. For example:-

Funeral: $2500
Assets available: $1500
Shortfall: $1000

In this scenario, the authorities would provide finance of $1000 to cover the shortfall between the available assets and the funeral cost. However, the situation is a little different for the deceased person’s partner, parent or guardian. In this scenario, the first $1876.56 of their assets would not be included in the funding calculation.

Carrying on from the above calculation, if we assume that the surviving partner or their parent/guardian had assets of $2500, the situation would be as follows:-

Additional assets available: $2500
Allowance: $1876.56
Assets included in calculation: $644.85

Consequently, the revised calculation would be as follows:-

Funeral: $2500
Combined assets: $2144.85 ($1500 + $644.85)
Shortfall: $355.15

In this example, the authorities would provide an additional $355.15 to make up the shortfall between assets included and the funeral cost.

Applying for a funeral grant

When applying for a funeral grant, you will need to provide an array of documentation such as:-

• Death certificate
• An itemised list of funeral expenses
• Proof of identity
• List of assets
• Confirmation of income

As the cost of a funeral in New Zealand is probably a lot more expensive than you first thought, many people now depend upon the WINZ funeral grant system.

Help is at hand

Whether looking for a funeral loan or eligible for state assistance, or both, there is help available in your darkest hour. Unfortunately, even though most people try to leave sufficient funds to cover the cost of their funeral, this is not always possible.

Conclusion

Even though cremation funeral expenses are usually significantly less than a burial, they still start at $4000. When you add in the array of additional charges, overall costs can often exceed $10,000 if you want a complete funeral. Thankfully, the WINZ funeral grant is in place for eligible applicants struggling to bury a loved one, family member or friend. Amidst the grief of losing a loved one, you need to take advice regarding funeral expenses and your eligibility for financial assistance.

It is important to note that while funeral loans are available, they will be credit checked as Alternate Finance is a responsible lender. Those ineligible for a commercial funeral loan will likely be eligible for government assistance.