Sec. 3. Notwithstanding any other law, a claim filed for recovery of aged assistance has priority in order of payment from the estate over all other claims, except the following:
(1) Prior recorded encumbrances.
(2) Taxes.
(3) Reasonable costs of administration.
(4) Funeral expenses in an amount not to exceed five hundred fifty dollars ($550). However, this amount is zero (0) if the decedent has prepaid funeral expenses that were excluded as a resource for Medicaid eligibility under IC 12-15-2.