Varadkar's cash pile: councillors in line for a €4,000 boost in pay
Published 26/07/2016 | 02:30
The country's 950 councillors are in line to receive pay hikes of around €4,000 under plans being considered by Social Protection Minister Leo Varadkar.
Mr Varadkar has pledged to increase councillors' pay from January in a move that will significantly boost his Fine Gael leadership prospects.
The Dublin West TD has given councillors two options in relation to their PRSI liabilities, the Irish Independent has learned.
At present, councillors take home gross salaries of just more than €16,500 per annum, plus expenses.
Under the current system, they pay a 4pc PRSI rate known as Class K but aren't entitled to any benefits.
The first proposal, known as 'Option A', will see councillors exempted from paying the controversial Class K PRSI, which was introduced by Fianna Fáil in 2011.
Such a move would see councillors save about €800 that they pay through these contributions every year.
'Option B' would see councillors still make a Class K contribution but in return they will for the first be entitled to a contributory pension.
The details of the two options are contained in a letter sent to members of the Association of Irish Local Government (AILG) last week.
Councillors are in the process of being surveyed as to their preferred option, which Mr Varadkar says he will introduce in October's Budget to take effect in the Finance Bill.
Sources say the most likely option to be adopted is Option A, which would see councillors' take home pay rise by almost €4,000 over a five-year term.
Mr Varadkar's announcement last month to introduce a review into councillors' pay was viewed as his first real move for the leadership.
Councillors make up 10pc and the vote in the upcoming Fine Gael leadership contest, but they are seen as being particularly important in terms of influencing TDs, senators and grassroots members.
However, the move is completely at odds with Mr Varadkar's public pronouncements on the issue.
On Friday, the minister said he is waiting for the moment when he "sits on the toilet" and it gets linked to the Fine Gael leadership race. "No matter what I say or do for the last six months people are linking it to the leadership of Fine Gael," he said. "I'm just waiting for the moment that I sit on the toilet and some commentator somewhere decides that's part of some sort of strategy."
Mr Varadkar also denied that he embarked on a solo run after he announced in Glenties significant future reforms to the social welfare system that weren't contained in the Programme for Government.
Mr Varadkar firstly indicated proposals to index social welfare payments, which would likely result in annual increases in the dole.
He also pledged for the State to pay a higher rate to jobseekers who have just become unemployed.
Yesterday, a senior Cabinet colleague indicated the measure would receive careful scrutiny.
"We decide at Cabinet. We will be looking at it obviously. We will look at Leo's (proposal and) his statement at the weekend," said Jobs Minister Mary Mitchell O'Connor.
She also dismissed suggestions other Cabinet ministers were concerned that such a fundamental reform was raised before it was discussed at Cabinet.
"No, I haven't. I am quite happy. Leo is a very competent minister," she said.
Leadership hopefuls chase limelight
The five frontrunners in the leadership race have all generated positive headlines in recent days:
Simon Coveney: His radical housing plan attracted only a handful of critics.
However, if he fails to deliver on the plan - particularly in the area of homelessness - it will leave his legacy in tatters.
Leo Varadkar: The frontrunner in the race has announced radical changes to the social system. His pledge to reward councillors will also assist him in his leadership bid.
Frances Fitzgerald: Has seen her prospects slip, especially due to issues relating to rural and gangland crime. But she has put in a solid performance in relation to the threat of terrorism and her pledge to deport jihadis without a trial has gone down well.
Simon Harris: His re-commitment to delivering 10,000 medical cards has curried favour.
Paschal Donohoe: Handling warring public servants effectively. The budget will bring his time to shine.