Coveney looks to score leadership points over Varadkar by hiking councillors' pay
Councillors are in line for a €1,000 pay hike in what will be perceived as an attempt by Housing Minister Simon Coveney to enhance his Fine Gael leadership prospects.
Mr Coveney, whose ministerial brief includes local government, suggested to party senators that he is going to give councillors a "modest increase" in the region of €1,000.
This would be supplemented by changes to the expenses regime, which currently entitles councillors to an unvouched allowance of around €2,500.
"This could be doubled to €5,000," the source said.
The move comes after widespread lobbying from Fine Gael senators and councillors for a pay increase on the back of what they see as a major increase in their workload since the previous government scrapped 80 town councils and cut their numbers from 1,627 to 949.
However, the minister's positive response is also being interpreted as an attempt to curry favour with party councillors, who will have a vote in the next leadership contest.
"It's clearly an attempt to match Leo," said one source, alluding to the fact that Mr Coveney's main rival for the leadership, Leo Varadkar, is expected to open up a range of social welfare benefits that were previously off-limits to councillors.
Local representatives are currently paid €16,565 a year and have previously requested an increase of €6,000.
A review of councillors' pay has been completed by Mr Coveney's department and a report on the issue has been sitting on his desk since he took office in May.
During a meeting with senators yesterday, Mr Coveney confirmed that councillors can expect an increase but remained coy about specific figures.
However, one well-placed source said it would be in the region of a €1,000 hike to salary.
Mr Coveney is due to attend a number of meetings involving councillors in the coming weeks, including the Local Authorities Members' Association in Cork on Friday.
His spokesperson last night told the Irish Independent that "no decision" had been taken in relation councillor's pay.
Any increases to pay and allowances will come alongside changes to councillor's PRSI regime.
Under the current system, they pay a 4pc PRSI rate, known as Class K, but aren't entitled to any benefits.
In July, Mr Varadkar proposed two options that would allow councillors move into line with other workers.
The first option tabled by the Social Protection Minister would see councillors cease paying PRSI entirely.
The second option would see councillors still paying PRSI, but at S Class, which means they would be entitled to benefits such as the contributory pension.
Mr Varadkar asked the two main bodies representing councillors - the Local Authority Management Association (Lama) and the Association of Irish Local Government (AILG) - to select preferred options.
Lama members were said to be split over the issue but the AILG chose the access to greater benefits option.
Mr Varadkar is currently compiling his department's Budget proposals for 2017 but it is expected he will announce the measure next month, so that it will come into effect in the Finance Bill in January.