In our 140-year history, Alex Gow Funerals (and its predecessor firms) has demonstrated an unwavering commitment to the families we care for during difficult times.
Recent media coverage of the government-administered Funeral Benefit Scheme has highlighted some misunderstandings regarding how this scheme works and the financial benefits it can provide. In summary, while the Scheme provides for financial assistance with funeral services, it does not cover full payment.
The Funeral Benefit Scheme was common in the funeral industry from the 1940s until the 1970s. Those who signed on would make regular payments until they had contributed £25 ($50) in total.
The Scheme contributions were then held in trust by the Queensland Government. Today, the Office of Fair Trading administers the Scheme and invests those monies held in trust with any interest accruing to the contributor’s benefit. These funds remain protected for contributors and are not accessible by Funeral Directors.
When those who signed up to the Scheme made their final payment and their contributions totalled £25 ($50), their nominated funeral director was required to issue a certificate to the beneficiary.
Most misunderstandings about the Scheme stem from the official wording which the funeral director was required – by law – to use on the certificate. The wording stated that, having provided £25 ($50) in payments, the contributor was entitled to a funeral service performed by their nominated funeral director, “without further payment as provided for in the individual agreement”. This is an important detail.
Unfortunately, many who seek to redeem the investment do not refer to the original, individual agreement, which states the benefit cannot exceed £25 (or $50 in today’s terms), plus any investment interest accrued.
From 1940 Funeral Benefit Schemes fell under the Friendly Societies Act until the introduction of the Funeral Benefit Business Act 1982, under which they are now regulated.
The legislation imposes a limit on the amount of benefit which is the legal entitlement of a claimant under a Scheme.
The effect of the legislation and rules is to limit the benefit to an amount fixed by the Registrar of Funeral Benefit Businesses. Originally the amount was $50 and is now $420.
The Office of Fair Trading determines how much claimants receive and declares the amount of the funeral benefit annually, and handles claims made to the Funeral Benefit Trust Fund.
Over the years, the Queensland Government’s conservative investment approach has ensured the money in this Trust has been protected. However, it has also meant that investment returns have not kept pace with the significant increases in funeral costs over the past several decades.
Therefore, as at January 2015, claimants were entitled to $420, as determined by the Office of Fair Trading. So while the Scheme provides for financial assistance with funeral services, it does not cover full payment.
The Benefit Scheme is different from what is today commonly called a pre-paid funeral plan. For example, as a member of the Funeral Benefit Scheme, the contributor, after paying a minimum of just 13 weeks contributions, that is, three shillings and three pence (33 Cents), was entitled to the full benefit of £25 ($50) plus any interest, in the event of the contributor’s death. This was a key benefit which attracted contributors to the scheme and one which is not available under today’s pre-paid funeral plans.
When a person believes they have adequately covered their funeral expenses through pre-payment into a Funeral Benefit Scheme, and a significant shortfall remains, it is often a situation that is hard to accept.
At Alex Gow Funerals, we understand people are in a state of grief when planning funerals for loved ones and we have worked hard to present the facts about the Scheme in a caring and sensitive way.
As a gesture of goodwill, when we conduct the funeral of someone who is a Funeral Benefit Scheme contributor, we match the amount of that person’s benefit. As at January 2015, this amount was $420*. Therefore, Funeral Benefit Scheme contributors will receive a contribution as at (1 May 2015, in total, $840) as financial assistance toward the cost of the funeral when using Alex Gow Funerals.
Meanwhile, we encourage community members to invest in a capital guaranteed funeral bond with a friendly society. This will ensure the monies invested and any interest earned is always available, even if contributions cease – no matter the reason.
For further information regarding the Funeral Benefits Scheme please refer to the Frequently Asked Questions.
We would encourage any contributors to the Scheme to contact The Office of Fair Trading, which administers the Scheme, if you have any questions or concerns.