According to Gary Taylor, group general manager at Morris & Morris Funerals, after the cost of a simple casket and a plot in a council-owned cemetery, most of the $2280.72 grant was spent.
Cemetery costs may also soon increase in the Far North, with Far North District Council to decide in June whether proposed increases to cemetery fees would go ahead, raising some costs 40-140 per cent.
As it stands, the cost of a burial plot is proposed to potentially increase from $771 to $1106, an ash berm from $107 to $258, and cemetery fees - which cover services like search fees, memorial permit processing and installation fees - from $27 to $38 an hour.
In Russel, the ash berm fee could rise from $351 to $502.
"The grant just hasn't kept pace with the real costs of burial or cremation and the cost of essential items for a funeral," Taylor said.
Taylor oversees the management of several Northland funeral homes, including Geards in Kaitaia, and stressed the grant was for the most vulnerable people in society.
"This grant is for those who just cannot afford a full funeral," he said.
"And these are families who also tend to, for cultural or religious reasons, require a burial rather than a cremation."
Boyes said the association's members often saw families being driven to make difficult decisions, and for financial reasons, would often have to choose cremation over a burial.
"We know some families can only afford to choose direct cremation options with no funeral at all," Boyes said.
Taylor explained people also needed to mark the occasion of the death of a loved one in a meaningful way.
"Funerals transport us from that time when they were alive to the time when they're no longer with us," Taylor said.
"Something like a cremation can be jarring to that traditional right.
"And we don't really understand how this is going to affect families later on."
According to Graham Allpress, Ministry of Social Development/Te Manatū Whakahiato Ora client service delivery director, the grant was for those who had no other means of meeting the expenses of a funeral or tangi.
Allpress said the grant was not intended to cover the entire cost and that applicants - beneficiaries or otherwise- were not always required to pay the grant back.
"Those who aren't eligible for a funeral grant may be able to have their funeral costs covered by another organisation, such as ACC or Veteran's Affairs, or through prepaid funeral cover," Allpress said.
The Funeral Directors Association of New Zealand proposes immediately increasing the maximum amount payable under the grant to $6300, which would cover 80 per cent of the national average cost of a simple funeral with a burial, and bring it into line with ACC's funeral provision for those who die by accident.
According to the association, the maximum estimated fiscal impact would be an additional $14 million.
"Compared to the other asks and investments that will be made during this year's Budget, we don't think this is asking for much for some of society's most vulnerable," Boyes said.
"There are also downstream savings. We know not being able to farewell someone can contribute to poorer mental health outcomes, which might later be a cost to government."
The association also noted the application process could be simplified, so that vulnerable people who were eligible were not having to face unnecessary barriers to accessing the grant during what may already be an incredibly difficult time.
Claimants must complete a 12-page form and provide supporting documentation.
The association is therefore calling for MSD to commit to reviewing the allowable income and assets of claimants to ensure the asset tests are reasonable, especially in the context of the cost of living outstripping increases in wages and benefits over time.
Allpress said the funeral grant, linked to the consumer price index, was reviewed in 2003 and increased by 47 per cent at that time.
"We recognise how the loss of a family member or loved one can affect people and we want to provide them as much support as we can," Allpress said.
"Any decision to increase grants would be a matter for ministers," he said.
