Funeral loans in NZ: what to check before you borrow for a funeral

Yes, you can borrow to pay for a funeral in New Zealand, but most families have other money they can use first, and some of it never has to be paid back. Work and Income's Funeral Grant pays up to $2,697.43 if the estate cannot cover the costs, ACC pays a funeral grant of up to $8,236.40 when the death was caused by an accident, and the person's own bank accounts can often go towards the funeral account. Check those, and ask the funeral director about paying over time, before you sign a loan.

Is there a government funeral loan in NZ?

Not for the funeral itself. Work and Income's help with funeral costs is a grant, not a loan: its bereavement page (updated 24 July 2026) says you don't have to be on a benefit to qualify for a Funeral Grant and you don't have to pay the money back. The repayable help it offers is for travel to a funeral or tangi: an Advance Payment of Benefit if you are on a benefit, or a Recoverable Assistance Payment if you are not, and that may have to be paid back depending on your situation.

Help that does not have to be repaid

• Work and Income Funeral Grant: up to $2,697.43, for people who meet its income and asset tests, when the estate of the person who died can't pay. It can go on the casket, hearse, cremation fees, a burial plot and the death notice (funeral notice wording examples). The Funeral Grant explained.
• ACC funeral grant: if the death was caused by an accident, ACC pays up to $8,236.40, and families of murder or manslaughter victims qualify for up to $10,000 towards funeral and memorial costs, according to Community Law's funeral costs page. ACC's financial support after a death page is where to apply.
• Veterans' Affairs: a funeral grant if the death was related to military service or the person had qualifying operational service, and possibly other support if not, per Citizens Advice Bureau (last checked 4 June 2025).
• Iwi, hapū and Māori land trusts: Community Law notes that Māori may be able to get a grant for tangihanga from their iwi organisation, or from Māori land trusts or incorporations the person had an interest in. Te Puni Kōkiri, the local marae or a Māori church can point you to others.
• SuperGold Card discounts: CAB notes some funeral directors offer a discount if the person who died held a SuperGold Card. It is worth asking.

One caution from Work and Income: if the person had a prepaid funeral plan or funeral insurance, the Funeral Grant may not be available, because that counts as other help. Find out what cover exists before applying for anything.

Can the person's own money pay for the funeral?

Often, yes, and Citizens Advice lists the person's bank accounts and life insurance as the usual ways a funeral is paid for. The Banking Ombudsman's guide (updated October 2025) explains the rules that apply. A bank freezes a person's individual accounts once it is told of the death, and it can only take instructions from someone authorised to act for the estate, which usually means the executor once probate or letters of administration are granted.

Smaller estates are simpler. The Ombudsman says that if the estate is worth less than $40,000, a bank may release money to a person under section 65 of the Administration Act 1969 without anyone going to the High Court, as long as it is satisfied of the death and no court application has been made. The bank will usually want a copy of the death certificate, so order one early; how to get a death certificate covers the timing. It is worth asking the bank directly whether it will pay the funeral director's invoice from the account, because that is a common request and saves anyone borrowing to cover it.

Joint accounts usually pass to the surviving account holder, so a partner may be able to pay from one straight away.

Can I pay a funeral director in instalments?

Ask. Many funeral directors take a deposit and agree a date for the balance, especially when a grant, an insurance payout or a bank release is on the way. Get the agreement in writing, with the total and the due date, and ask whether interest or a late fee applies if it runs over. This costs nothing to ask and is usually cheaper than any loan.

Can I bring the cost down instead?

Usually, and by more than most loans would cover. A direct cremation, with no service at the time and a memorial later, is the lowest-cost option most providers offer: one national provider publishes prices from $1,945 in Auckland. Direct cremation costs, city by city has the full list. On a traditional funeral, ask for an itemised quote and which lines are optional: flowers, catering, printed booklets, a limousine and newspaper notices all add up. What a NZ funeral costs sets out each type side by side.

If you still need to borrow

Sometimes the grants, the estate and a payment plan still leave a gap. If so, these are the questions worth asking before you sign:

• What is the total I will repay, in dollars? Not the weekly payment, not the rate. A small weekly figure over a long term can cost far more than the funeral line it covers.
• Is there an establishment fee, and fees for paying early or late?
• Could I borrow from my own bank, or use an existing credit card or overdraft, instead? These are usually cheaper than a loan advertised specifically for funerals.
• Can whānau share the cost? Koha at a tangihanga and family contributions have long covered funerals, and a family agreement written down is fairer than one person carrying a loan.

A free, independent financial mentor can help you weigh this up. MoneyTalks is the national free helpline that connects people with one, and Good Shepherd points people to it.

What about no-interest loans?

Good Shepherd NZ runs Good Loans, which are no-interest and fee-free for people on limited incomes, and are paid directly to the supplier. But its loans page says they can't be used for urgent needs, because applications take time, and it won't lend where Work and Income can help with the purchase. So a Good Loan is not a way to pay a funeral account this month. Good Shepherd also offers loans to consolidate high-interest debt, which could help later if a funeral was paid on expensive credit, but at the time of writing it says it has paused new enquiries for debt-consolidation loans.

When there is no money and no family

CAB notes that local councils may waive or reduce the cremation or burial fee when a person dies with no money for their own funeral and no next of kin. If you are a friend or neighbour in that situation, the council and a local funeral director are the first people to talk to.

Ready to talk to someone local? Our directory lists FDANZ members by region. If someone has just died, start with the first hours.