Call to end county council parachute payments for TDs

GOLDEN handshakes for TDs who left local councils after being elected to higher office should be scrapped, according to a leading academic.

He has labelled the payments odd and inappropriate.

Dublin City University professor Eoin O’Malley said the parachute payments to highprofile ministers and politicians are part of a loophole which should be tightened. He has suggested scrapping the scheme and changing how local councillors are paid.

It comes after the Sunday Independent revealed more than 20 current national politicians, including well-paid business people, a high-profile barrister, ministers and an MEP, shared almost €1m over the past five years after leaving local councils.

They benefited from a scheme entitling former councillors to receive a payment, known as a gratuity, in recognition of their service to local politics on their retirement from city and county councils.

“When the initiative was designed, it was because councillors were not very well paid and they were probably taking a loss of income, because if you do it properly you put in a lot of hours,” Mr O’Malley said.

“It was a reward for their service and compensation for lost pay. If you become a TD or a senator you are moving to a higher-paid job than you would otherwise have had. It doesn’t seem appropriate.”

He said councillors who vacated council seats after being elected to the Dail or Seanad did not suffer the same financial loss. He said an apparent loophole meant they also benefited from the retirement gratuities despite incurring no financial loss.

TDs earn a basic annual salary of more than €96,000.

Meanwhile, senators earn €68,111 a year before tax.

On average, councillors who received gratuities over the past five years after vacating their seats earned an average gross payment of more than €28,000.

“It looks like a loophole but I suspect it was consciously designed to reward councillors,” Mr O’Malley said.

“It does seem odd that if you are moving from one electoral office to another — a very well-paid electoral office — that you get this payment at the end of your service. It doesn’t seem a sensible thing to do given that they are not suffering as a result of their loss of the council seat.”

He suggested the loophole could be fixed by changing the way councillors are paid. They currently get an annual gross payment of €17,000. This is taxable, depending on individual circumstances.

Mr O’Malley has suggested scrapping the gratuity payment scheme and improving the salary for local representatives. “I would presume the solution to that is to increase the pay of councillors, so as to pay them properly when they are on the council rather than to give them any kind of gratuity afterwards.”