LONG-serving councillors will receive up to €16,000 in "parachute payments" as town councils are abolished next year.
Environment Minister Phil Hogan, pictured, has now set up a dedicated budget to pay for the cost of retirement gratuities for over 700 town councillors.
He is abolishing 80 town councils before next year's local elections, but councillors on them will be entitled to pay-offs once they retire.
A town councillor who has served a full five-year term and is not elected to any new office will qualify for a gratuity of €2,800. The maximum payment for those with 20 years' service is capped at around €16,000.
Mr Hogan (below) confirmed that his department had set aside money to pay for the cost of retiring town councillors – but would not say for how much.
"We have budgeted for gratuities because people, in good faith, stood for the local elections in 2009 on the basis that they were going to be there for five years and on the basis that they were going to continue in office," he said.
Town councillors will not be entitled to a retirement gratuity if they manage to get elected to a city or county council.
Mr Hogan said he could not say how much money had been put aside to pay for the gratuities for this reason.
"Some of the town councillors will be able to stand for the county councils and we can't give the final estimate about what it's going to cost," he said.
Town councillors are the lowest paid politicians in the local Government system, with annual salaries ranging from €2,281 to €4,181.
Town councillors have complained that the expenses of one TD would pay for a town council for a whole term.
They will only get paid their retirement gratuities once they reach 50 years of age.
Mr Hogan's 'Putting People First' document setting out reforms to local government does not contain a cost estimate for gratuities, but they should be "quickly recovered" through savings. The overall reforms are due to save €40m to €50m after all costs are paid.
Mr Hogan was speaking as he officially a new €2.5m relief road around Dingle town. The road, which connects the main N86 Tralee-Dingle road with the road over the Conor Pass scenic route, will substantially reduce traffic congestion in the town.