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Loophole lets politicians pocket extra €500 a week

A TD or senator can make an extra €400 or even €500 a week tax-free on top of their salaries from a little-known loophole in the law.

This latest revelation will stoke up public outrage over politicians' expenses in a week when the Ceann Comhairle is facing the chop over his expenses extravaganza.

Members of the Oireachtas can legally pocket the profit they make on their expenses and the taxman can do nothing about it.

Even if they get a lift to Leinster House and stay for free with friends in Dublin, a TD or senator can claim the maximum allowance -- and trouser the expenses.

One leading accountant said last night that the loophole is another way of giving money to members of the Oireachtas tax-free.

He said: "It means that a politician can take a train from, say, the Ceann Comhairle's constituency of South Kerry that costs €72 and make an unvouched claim for three one-way road journeys to Dublin and collect €531, leaving a tax-free profit of €441," he said.

The loophole is buried in a special section exempting TDs and senators from paying tax on their expenses in the Taxes Consolidation Act 1997.

The astonishing tax-free ride for politicians is in Part 36 of the act headed "miscellaneous special provisions" which states that: "An allowance payable under section 3. . . shall be exempt from income tax and shall not be reckoned in computing income for the purpose of Income Tax Acts".

The body that oversees members' expenses in the Houses of the Oireachtas admits that a member can take a train and claim mileage but did not know if any do this. Over the past two years, 166 TDs have been paid average expenses of €55,250 per annum on top of their €100,000-a-year salary.

Meanwhile, the 66 senators were paid annual expenses averaging €47,000.

Other taxpayers are taxed on the excess if they are paid more than the cost of their legitimate expenses.

Irish Independent