The [DECEPTION] Case of Victoria

If you read the the Case of Margaret you will see her initial comments to us were:

"I have read heaps of articles from financial advisors most of them say the new deeming rules will mainly effect folk who have lower nest eggs."

And our comment:

"So her research confirms ours that "Big Super" is conducting a Terror Campaign to scare Pensioners to REMAIN on the so called Grandfather Rules, when that advice flies totally in the face of all the modelling we have done [which SURELY the Govt has also done and is AWARE of the deception] where indications to date show the average Pensioner stands to LOSE $50,000 or so over 20 years by taking that advice to remain on the Grandfather Rules."

To explain further about this deception, Margaret had actually sent us one such article that had her terrorised, and hence was asking us for proper advice based on 20 year modelling.  Here is the hypothetical case from Affinity Wealth Services:

Case Study – Impact of Deeming on Account Based Pensions *
Victoria is 65 years of age, a single non-homeowner and has just retired. She has $300,000 in a superannuation account which she wishes to use to commence an Account Based Pension. Based on her life expectancy of 21.62 years, her Centrelink Deductible Amount would be $13,880 (i.e. $300,000/21.62). She also has $45,000 in a bank account.
Under the current rules, if Victoria draws the minimum annual income of $15,000 (i.e. 5% of $300,000), around $1,120 would be counted towards the Centrelink income test (i.e. $15,000 - $13,880). In addition, Victoria would have deemed income of $900 from her bank account. Her total counted assets would be $345,000. Victoria is under the threshold for both the income and assets test for a single non-homeowner and would therefore be entitled to the full Centrelink Age Pension (currently $842.80 per fortnight).
In contrast, if Victoria was to be assessed under the new rules, the entire $345,000 in financial assets would be deemed, equating to annual assessable income of $11,355 under the income test. Her total counted assets would remain at $345,000. When Victoria is assessed under the asset and income test, the income test now produces a lower result because of the high levels of deemed income. This in turn would reduce Victoria’s fortnightly age pension benefit to $704 per fortnight, a reduction of more than $3,500 per annum.
* Assumptions: Centrelink Rates and Thresholds as at 1 July 2014.

There are some very obvious indications that spring to the eye to say the example has been "cooked" to assist the Govt terrorising Pensioners to Go for Grandfather, and the most obvious one is that Victoria is not a home owner.  Now as seen for the REAL case of Margaret, it would be most unusual that a woman who had accumulated $300,000 in Super had thrown away up to a million dollars on rent over her 50 years or so of working life.

Of less importance is Victoria does not even own a kitchen chair [to keep her Assets artificially low] but has $45,000 in the bank [to start her deeming on warm].

So by inspecting Margaret's case you can see if Victoria had contacted us and not Affinity she could have "set the sails on her ship" and enjoyed her retirement by spending her hard earned Super AND getting another $119,266 from the Govt by avoiding Grandfather [or $95,061 if Victoria was a bloke].

But on behalf of Affinity, obediently protecting the Govt interests, there will be the insinuation that we "cheated" by allowing Victoria to spend her own money,  so we go around in the same legal circle.

The circle is that the Govt virtually compels people to sacrifice income over their working life "to use in Retirement".  Then at 65 the Govt puts a big "Use By Date - Age 85" on the Pensioner's forehead.  Then the Govt says if you DO use it [rather than just nibble at the edges] Grandfather will get out his big stick and clobber you about $100,000, and an extra $25,000 if born a woman.

So as always the circle is completed by the very legitimate legal argument that such is totally discriminatory [particularly to women] but most of all is CONFIRMED as such by the ACTION of the Govt in Amending the legislation to remove the discrimination.

So all that remains for Govt is to MAINTAIN the lie [that Grandfather is nice] for another 20 years, or they are looking at about $200 billion extra Age Pension payments, which even makes Costello's Future Fund look a little thin.

And there is another delicious irony that if Grandfather cat DID get out of the bag, the Govt would be forced to dip into the Future Fund, which would be poetic justice as it is a Piggy Bank for those who never contributed to their super in the first place.