Frequently Asked Questions

The Association was founded in 1932, as a social organisation and the need for a scheme to be made available to members to save for their Funerals was set up in 1933. Primarily the scheme was aimed at our low-income earners, and was in the days before Prepaid Funerals and Bonds, etc. A unique scheme was devised, very simple and affordable, with the main factor being the ability to put in what one could afford, when they could afford it, and with no fixed period or amounts.

Today, we are believed to be the only organisation in Australia that permits such method of savings – no fixed amount, and no obligation to make regular payments. A similar organisation did exist up until 1989 but no longer exists.

Your Funds are invested on your behalf. These Funds earn interest or dividends, and each year, the total net profit made by the Fund is distributed to members.

As soon as the accounts have been finalised and audited for the year and final dividends distributed, members are provided with a twelve (12) month statement.

On your death, the total amount accumulated in your account is paid out, less a fee of 5%, which is the prime method of running the Fund. This is referred to as your Benefit.

Membership is open to all irrespective of age or health. Remember that it is a form of savings account, so the younger you are on joining, the more interest you earn.

You must be a member of our Association. This is an annual fee of $12.50, and entitles you to join with our twenty social branches scattered around the state, and with that enjoy the social environment, trips, outings and concerts that each branch implements.

Or you can join solely with the purpose of joining the Funeral Fund, through the Head Office.

Complete the Application Form and send in your first contribution (minimum $100) with the $12.50 Membership Fee. Total first payment $112.50.

The Application Form can be posted to your address or downloaded directly from the website.

No. Each person must have a separate membership and account. However, we have included in our Constitution a right for a situation where a member does not have sufficient Benefit in the Fund to pay the cost of the Funeral, the remaining member can draw on his/her balance up to the amount needed to cover the Funeral cost..

Payments or contributions can be made by:

Money received at Head Office will always have a receipt issued and sent on the day it is received.

Your initial contribution must be at least $100, plus a $12.50 fee. This is not a fee, but is credited immediately to your account.

As of Sept 2021, the maximum you can contribute is $13,500.

This figure is monitored closely by us in relation to Funeral costs, which seem to be rising far greater than the rate of inflation and we regularly seek permission from the Dept. of Treasury to increase the limit when deemed necessary.

The answer to this is no – in fact quite the opposite.

Because this is not a bank type account, and the fact you cannot withdraw your Funds, it is deemed by Centrelink that these Funds contributed do not form part of your assets or income. Many members have taken advantage of this fact and have put money into our Funeral Fund to reduce their assets and therefore get a bigger pension.

With the addition of your Dividend, your account balance can exceed the approved Contribution level but Centrelink only exempts from your assets the $13,500 contribution.

It is important to note that we have absolutely no contact or relationship whatsoever with any Funeral Director. Whoever conducts your Funeral is of no direct interest to us. However, we do recommend that you pre-plan your Funeral, so irrespective of who conducts the Funeral or what the cost is, we will pay out the total accumulated amount (less the 5% referred to).

We strongly recommend that members take the time to research the many Funeral Directors and Memorials that are available to find the one who you are most comfortable with, including service, price, and inclusions.

These vary tremendously. Currently, the cheapest funeral, which includes all the basic costs of a cremation seems to be around $6,000 to $7,000. Burials are usually much higher. However, we are now seeing many Funerals coming in between $9,000 and $10,000.

Making a claim is very simple. We will pay to any one of four (4) types of claimant:

Claims by Funeral Directors are not encouraged. However, we have no problem in paying direct to the Funeral Director if the Claimant so wishes. This can sometimes save quite a large sum in the Funeral Directors’ discounts for prompt payment.

Payment is usually made within 2 – 3 days of receiving a claim.

To make a claim, the person claiming has only to sign a simple claim form in front of a J.P (so that we know the right person is entitled to claim).

Because we have no direct interest in the Funeral itself, we pay out the full Benefit to the person claiming irrespective of the cost of the Funeral. The small fee of 5% of the total amount (benefit plus dividends and interest) is deducted on the release of the funds.

The cost of the Funeral is not relevant to us. We will pay out the full entitlement to the claimant in whatever manner they instruct us.

If the Funeral cost is more than the Benefit, then it is the responsibility of the Executor to pay the Funeral cost, and the proceeds of the Benefit can go towards that cost.

We also maintain that the Benefit paid does not form part of the Estate and should not incur Executors’ fees. This is an application of the Centrelink rules – once a contribution to the Fund has been paid in, it no longer forms part of your assets for Centrelink and also therefore no part of your Estate. However, this would only apply to the level of the cost of the Funeral. If the Benefit exceeds the Funeral cost then the amount over could form part of your Estate and incur Executors’ fees.

Members can and do frequently forget to renew their membership because of the ageing process: moving, forgetfulness, failing to tell relatives or carers they are in the Fund, plus a whole number of other reasons.

However, we are permitted by the Government to deduct the Annual membership fee from the dividends/interest credited to your account regardless of whether you make a payment or not. This deduction of fees therefore protects you at all times from being deemed unfinancial. This is not done until a member is more than 8 months in arrears. Rest assured: we will protect your Fund from government rules and regulations.

It does not matter where death or the Funeral takes place – the Funeral Fund Benefit will be paid to your claimant wherever they may be.

Currently we have around 1000 members in the South Australian Pensioners’ Association, of whom 700 are in the Funeral Fund.

Currently we have over $3,500,000 invested on behalf of our members.

We exist under an SA Act of Parliament – The Benefits Association Act, and accordingly have to conform to the Government regulations. Our performance and investment policies are laid down by the Department of Treasury. Under these rules, we are not permitted to invest any more than 20% in the ‘growth’ share market, and whilst this limits our ability to take advantage of the large profits that can be earned in this area, we are also protected from the very large losses than can and do occur.

The remaining 80% has to be invested in cash, term deposits, Bonds and the like. Our audited accounts have to be submitted to the Dept. of Treasury annually. Currently our Funds are invested through an IPAC South Australian account, and are spread over some 20-50 companies and institutions. They are not invested directly in IPAC, but in our own name, so any risk is very wide spread.

In the 1960s the South Australian Government recognised our Association and brought in a Benefits Association Act. At the time we were registered under the Associations Act, but today we currently operate under both Acts. In fact, we are the only Association still operating under the Benefits Act.

In 1989 after the failure of a similar Funeral Fund, we were audited by the Government and found to have considerable assets in excess of actuarial Liabilities as distinct from the failed Fund. This led to reconstruction of the Association – we became computerised, had special computer programs written, changed our method of calculating the Benefits payable on death, distributed the surplus on hand by crediting the individual accounts, and revised the Investment Philosophies to give maximum security to the Funds yet obtain the best of investments from steady and reliable income (a Policy which has regularly enabled us to make a distribution every year since then). We have succeeded in this despite a wild share market and investments ups and downs. We have never failed to make a distribution, and most years the distributions exceed the earnings of other Funeral Benefit Plans, such as insurance companies and pre-paid funerals.

The Association has stringent safeguards to avoid any takeover by Investment organizations and to prevent the changing of any rules that could in any way lessen the security of safety of the Association. The rules can only be changed by the members at an annual conference, and whilst we have members, we cannot be taken over unless the members themselves so determine.

Naturally you Funeral Fund with us is confidential. We will not disclose your Benefit to any unauthorised person, and in fact we discourage members from authorising a Funeral Director to access this information.

To ensure this we ask you to sign a form on joining wherein you are asked to nominate a person who will act on your behalf on your death. Occasionally a member does not tell their family that they are in the Fund and no claim is made. We are often able to trace the relatives through this information on the application form.

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Let’s say you wish to cover your Funeral in one lump sum. In the short term, a Prepaid Funeral Plan should present no problem. However a word of warning – be sure that all the extras you are likely to want are included. We are seeing some fairly heavy extra and unexpected costs coming out of “fully pre-paid” plans. Another serious consideration is that having made a pre-paid Funeral payment you are now locked into that Funeral Director and cannot change – even if that Director goes out of business or sells.

There is also another consideration on a long term basis. A question posed by us to Canberra in regards to Prepaid Funerals could not be answered by the hierarchy responsible for the Legislation for Funerals.

You get back what you put in plus interest. The question is how much does it earn? Do Funeral Bonds earn a sufficiently high rate of interest? Our Accountant advises that our Funeral Fund consistently earns more than money invested in Bonds because of our very low cost of running the Fund. You need to be sure you are earning the best investment rate to keep pace with inflation.

Also, Bonds invariably require fairly substantial lump sum deposits and this may not suit you. However, like our Fund, you do have the flexibility to select your own Funeral Director.

As stated before, we strongly recommend this. You can choose the Funeral Director you feel comfortable with, and have all the details you want decided there and then and without pressure. Otherwise your family are going to have to make decisions quickly, with no time for ‘shopping’ around for the best Funeral Director; they will have to make many hard and expensive decisions whilst under the stress of losing their loved ones.

Remember too that a pre-planned Funeral arrangement is not binding on your family. If, for whatever reason, they wish to change either the Funeral Director or any part of the pre-planned arrangement they can. This can be of huge Benefit, especially in the case of a long duration of time passing from when the preplanning was done. Pre-planning is an ideal adjunct for our Funeral Fund.

Our earning rates are regularly and considerably higher. You choose your Funeral Director. You pay in what you want to, when you want to, with no fixed amounts or times. You get back the total Benefit irrespective of the actual Funeral Cost. It’s that simple.