Katikati pensioner Ken Allen is warning elderly people about the costs of funerals – and Work and Income New Zealand's role in assisting in paying for them.

Ken says many pensioners have a mistaken belief WINZ will help with funeral costs even if they have savings – and that's wrong.

Ken Allen had to move out of his home due to lack of funds after paying for his wife's funeral.

After Ken's wife Rona died last November, the 82-year-old says WINZ forced him to use the couple's joint savings to pay for her funeral and wouldn't pay any assistance to allow him to remain in his Waikanae flat.

With joint savings totalling about $8700 when Rona died, her funeral costs were $7367. WINZ told Ken he had to pay the lot because he had more in savings than the WINZ asset limit of $1720.

'I was in a unit in Waikanae paying $500 a fortnight for rent plus water rates,” says Ken.

'After the first living alone allowance came through I paid up all the rent and everything, and it left $120 to live off for the two weeks.

'During that period of time I had to see a doctor. That cost $50 plus prescriptions because I wasn't feeling too well. It was impossible for me to live there.”

Ken's now living in the RSA village at Katikati. One of his sons put his name in for it. He's in a single unit at less than half the price of what he was paying in Waikanae.

He's written to politicians about the treatment he received from WINZ.

Ken received a reply from Social Development Minister Paula Bennett's office, which suggested his best option was to set up a ‘funeral account or funeral plan'.

'If the money the constituent had set apart for his own funeral was kept in a funeral account or funeral plan this would not be considered in assessing the $1718.52 asset limit.

'I would suggest that your constituent now set up a funeral plan for himself, which may mean that he would be eligible for other third tier assistance should the need arise.”

But Ken says: 'How can you do that when you're living off the pension?”

The Social Security Act 1964 states a single person can only have assets of $1031.31 and a married person $1718.12.

But houses, cars, boats aren't classified as assets – WINZ only looks at what money is in applicants' bank accounts.

'You could own a house worth half a million, or a million dollars, and have motor vehicles, boats and God knows what.

'If your partner passed away you could sell them and get the cash, and they don't classify it as access cash.”

The maximum WINZ funeral grant is $1998.57, which is thousands less than the maximum $5879.81 paid by ACC for funeral expenses following an accidental death – and it's not means-tested.