€3.5m payout for retiring TDs
Windfall in first year out of office
RETIRING politicians will reap a massive €3.5m in golden handshake payments in their first year after quitting the Dail.
The 15 TDs who have already declared they will not run in the next General Election are set to benefit from a raft of generous parachute and pension payments, an Irish Independent investigation reveals.
In some cases, backbench TDs will receive payments totalling more than six times the average industrial wage in their first year out of office.
TDs such as independent Jackie Healy-Rae can expect payments of up to €197,000 over their first 12 months in retirement.
Former ministers such as Jim McDaid are set to receive €282,000 in various payments in the same period to cushion the blow of leaving parliament.
The 15 retiring TDs, who also include Justice Minister Dermot Ahern and former minister Rory O'Hanlon, will receive parachute and pension payments totalling €3,467,293 within a year of bowing out of the Dail.
The scale of the payments is set to cause anger as the country braces itself for a series of savage hairshirt Budgets.
Further retirements are expected ahead of the election.
The generous parachute system is likely to encourage many more TDs to go as they can expect to earn more from their pensions than they would if re-elected to sit on the opposition benches or government backbenches.
Under the current system, TDs who retire or lose their seat, receive a once-off termination lump sum and pension lump sum, which are generally non-taxable.
A series of taxable termination payments are also paid for the first year after they leave the Dail, after which a generous taxable pension is paid. A second pension is paid to any TD who has ever had a full or junior ministerial position.
Labour's Michael D Higgins, for example, whose current TD salary is €98,424, can expect to receive two separate pensions on top of termination lump sum and termination payments.
The former minister is set to retire after 25 years as a TD.
On retirement, he can get a lump sum payment, equivalent to two months' salary (€16,404).
Each month during his first year of retirement, he is entitled to a termination payment, totalling €61,515.
Once these payments end, a pension lump sum will be paid, totalling €159, 873.
Mr Higgins will then be entitled to a TD's pension of €53,291 a year and an additional ministers' pension of €37,501.
Last night, Fine Gael indicated it was likely to reform the system of retirement payments if it leads the next government.
"We've long recognised that the issue of public representatives and remuneration needs to be addressed in order to have the moral authority to lead the country," a party spokesman said last night.
A spokesman for the Oireachtas defended the system. He said: "Oireachtas members make a contribution of 6pc of salary toward their pension and the amounts paid are based on standard civil service rates."
The spokesman said that termination payments operated in the same manner as redundancy payments.
Parachute payments have ballooned in recent years in tandem with large increases in TD pay.
A TD's basic salary has increased from €44,068 in 1997 to €92,672 today. In 2000, changes were also introduced so that any TD with more than seven years' service would be paid a higher salary.
These increments will be abolished for the next Dail.