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Found this info online, most states have similar programs. It's not a "free grave" but rather assistance to pay for it for indigent persons. Often, the reality is a cremation due to costs.  See below.
njsfda.org/public/solutions/financial-support/public-assistance
Public Assistance (Welfare)
The State of New Jersey helps the needy pay for funerals through the Department of Human Services (DHS). Apply for "public assistance" funeral funds by calling the board of social/human services (or welfare agency) in the county in which the deceased resided at the time of their death. For a list of county boards of social/human services call the DHS at (609) 588-2000
Individuals eligible for state public assistance funeral and burial funds include:
Newly approved (within 15 days death), eligible applicants or active recipients of these programs: Work First NJ/ Temporary Assistance for Needy Families (WFNJ/TANF), Work First New Jersey/General Assistance (WFNJ/GA), Supplemental Security Income (SSI) and Medicaid Only; Stillborns/deceased newborns of WFNJ, SSI and WFNJ/GA recipients.
WFNJ recipients in a NJ public institution (not a penal or correctional) where they died within the first six months.
WFNJ/GA recipients who died while patients in hospitals.
Medicaid Only recipients who lived in the community or in Medicaid approved facilities.
Medically Needy recipients in nursing homes.
SSI recipients in hospice care programs.
Individuals in Adult Foster Care.
Community Care Program for the Elderly and Disabled (CCPED) recipients.
Individuals who died while satisfying WFNJ sanctions.
Children of WFNJ recipients (eligibility is subject to the program's family cap).
AIDS Community Care Alternative Program (AACAP) recipients.
Recipients of WFNJ/GA benefits at least six months prior to death.
Those found eligible for Assisted Living Services based on Medicaid Only eligibility.
Medicaid-eligible individuals in long term care facilities who were not receiving Medicaid benefits at the time of death because they were under the care of a hospice agency. (does not apply to those who received hospice care at home).
New Jersey Care-Special Medicaid Program for Aged, Blind and Disabled recipients.
SSI or Medicaid Only recipients who died in a New Jersey institution (not penal or correctional).
New Jersey Workability Program participants.
Funeral Payment Limits
The maximum amount the state will pay for the funeral home portion and the cemetery portion of a public assistance funeral appears below. The fourth column combines the two amounts and represents the maximum amount the state will pay for the complete funeral (funeral and cemetery portions).
"Allowable Supplementation" is the amount family and friends can add to the combined maximum amount before the state will reduce its payment proportionately. The last column shows the maximum amount the state will pay for a public assistance funeral combined with the maximum amount the state will allow others to contribute.
Supplementation by Family and Friends
The state allows family and friends to contribute money toward a public assistance funeral. Families can apply supplementation to funeral home costs, cemetery costs or both. However, the state limits how much supplementation is allowed.
The supplementation cap is $1,570 for individuals aged two and over. If the family contributes more than $1,570 the state will reduce payment dollar for dollar. For example, if the family contributes $1,670 ($100 more than the cap) the state reduces its maximum adult funeral reimbursement amount from $2,770 to $2,670.
A deceased's assets cannot be used to supplement their funeral. These assets will be collected by the State of NJ. A decedent's assets will not affect the reimbursement received by Funeral Directors and Cemeteries. Assets are:
Cash on hand, in a bank account, or nursing home personal needs account (PNA);
Securities, real estate, antique furniture and automobiles;
Life insurance or death or funeral benefits regardless of the beneficiary (refunded premiums are exempt);
Money paid and/or owed to the deceased before or after death.
How to Arrange a Public Assistance Funeral
To arrange a public assistance funeral, make an appointment with a funeral home. Tell the funeral director that you think the deceased is eligible for a public assistance funeral. The funeral director will contact the county board of social services to see if the deceased qualifies and seek “conditional” approval.
The funeral director will make funeral arrangements using welfare funeral planning guidelines. If you want more than the guidelines provide, ask about supplementation. Please note that few cemeteries accept the state maximum $524 as payment in full and usually require supplementation.
The funeral home may ask you to sign a promise to pay in the event that the deceased doesn't qualify for a public assistance funeral. If the payment request is rejected, the funeral home will bill you for the balance in addition to any unpaid supplementation amount.
Cemetery and funeral home charges are separate. After the services, the funeral home will submit a bill for up to $2,246 to the county board of social services. The cemetery will submit for a maximum payment of $524.
Some funeral homes do not handle welfare funerals and may refer you to another funeral home that does.
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Is the person a Vet? If so contact your local VA. Here in South Jersey Salem and surrounding counties have their own cemeteries. Lot and plaque are provided. I think u pay for the opening. Finn's Point National Cemetary u have to be cremated. The burial is free. Both places send reps from the armed forces to oversee. Your funeral director may be able to help you locate a lot or have information. Another thing is to have person cremated and ask to have them buried with a family member like mother or father. Again, there will be a charge for opening a place for the box.
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