Rising costs mean families on low incomes are struggling to farewell loved ones with dignity and respect, the Funeral Directors Association says.

This month the Work and Income funeral grant increased by seven percent to $2445.

Association chief executive Gillian Boyes said Work and Income often paid out 80 to 90 percent of the grant.

The grant was last reviewed in 2003 and went up with inflation, she said.

But just like everything else, funeral costs had increased too, Boyes said.

She told Checkpoint some funeral directors were accepting drip payments for services that could take years to pay off.

"It's getting pretty hard for them to cover the costs with the increasing costs that they've got as well."

The big costs involved in a funeral were the plot, casket and funeral director's fee, she said.

People in Gisborne and Bay of Plenty, on a per capita basis, tend to be the highest users of the funeral grant, according to figures obtained from the Ministry of Social Development by the Funeral Directors Association.

"They just haven't got the money for a funeral and so they just have to rely on government support."

How much does a basic funeral cost?

"Something really basic, perhaps with a cremation would be about $6500 on average," Boyes said.

"Something with a burial might be upwards of $8500 - a long way away from that $2400 figure.

"When funeral directors charge their fee, they're consolidating all of their costs into one invoice for the convenience of the family."

Even the most simple funerals still require embalming, body transfer and casket costs, which were still likely to exceed $5000, she said.

"There's not a lot to cut out from there, there's things you can do as a family - do your own flowers, do you're own catering etc - but those are not the big costs."