Prime Minister Scott Morrison announced on Tuesday night that both indoor and outdoor funeral services would be restricted to just 10 people including mourners, staff and the priest or celebrant, all of whom would have to adhere to the requisite one person per four square metres.

Services will have to become more intimate or be live-streamed, with grieving people advised not to kiss, embrace or shake hands.

Wagga Funeral director Scott Bance told The Daily Advertiser "everything had changed", but his funerals would be going ahead while following the restrictions.

"There's been a bit of misinformation about funeral services not being allowed ... we might just have to be adaptive," Mr Bance said.

"It [the restrictions] really brings it back to just private family services now. The challenge is that most families are more than 10."

Mr Bance said the rules around physical contact would be very difficult for bereaved family members.

"In funeral services when you're wanting to console someone, it's natural to want to offer a handshake or an embrace," he said.

The government announced on March 22 that places of worship would need to close to aid in slowing the spread of the virus, and some have set up arrangements with other funeral homes.

"The Catholic diocese has advised that funerals can be moved from churches to other [funeral] homes, Mr Bance said.

Wagga's Daniel Woods Funeral Services said it was in talks with Canberra's Anglican and Catholic dioceses, as well as the Catholic diocese in Wagga.

"The government is bringing things more into line with their other rules And unfortunately funerals are part of that," director Daniel Woods said.

"The only thing that's not changing is change."

Mr Woods said recording and streaming of services, while "not a new thing", would now take place much more frequently.

Wagga's oldest funeral home, Alan Harris McDonald, is preparing for a "new age" in the industry, where lives can be celebrated remotely.

Director Joshua Paul said there had been a service on Tuesday morning which was streamed to more than 200 guests around the world.

"We anticipated this would happen ... it's happened a little quicker than we thought however our role as funeral directors is to support and guide families in their difficult time no matter what situation we're in," Mr Paul said.

"We also have the ability for people to interact in the funeral as it's taking place ... we might have [a family member] still able to say a eulogy from somewhere else."

Mr Paul said it was important to still be able to celebrate the life of a loved one in a way that was befitting of their memory.

"The funeral industry hasn't always been at the forefront of technological innovation but this has kind of forced us to be," he said.

"This isn't a time when we need to stop doing funerals. It's a time when we need to adapt."

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In Italy, where morgues are inundated by the highest COVID-19 mortality rate in the world of more than nine per cent, traditional funeral services have been forgone.

Australian Funeral Directors Association CEO Dale Gilson said the the funeral industry here was prepared for a potential spike in Australia's death rate due to coronavirus.

"The number [of deaths so far] is not significant and the members are very capable of handling the increase as required," Mr Gilson said.

"It's an ever evolving situation and we [the AFDA] are monitoring the situation closely."

Second generation funeral director Patricia Butler, who oversees services at Wagga's Abelia Lady Funerals and Maurice R Moroney & Co, said it would be heartbreaking for families planning funerals over the next six months.

"It's going to be so hard ... because you want to say goodbye but you also want to celebrate," Ms Butler said.

Ms Butler said many people in rural NSW had large families and under usual circumstances she could host services packed with up to 1500 mourners.

"Now we have options including live-streaming or an intimate family service ... I think people are very understanding" she said.

Ms Butler asked that bereaved families allow themselves to be "guided by the experience of the funeral director."

Ms Butler said funerals would continue to be a crucial service in a time of great uncertainty.

"Everyone needs to say goodbye," she said.

The Australian Funeral Directors Association is calling on the government to classify its members' businesses as 'essential services'.

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