SEVERANCE PAYMENTS:SEVERANCE PAYMENTS of up to €75,000 will soften the blow for the 30-plus TDs who lost their seats in the general election.
Government ministers who lost their seats will qualify for a further €90,000 in severance payments.
TDs who lose their seats are entitled to a termination lump sum equivalent to about two months’ salary. This is not taxable.
In addition, they get termination payments each month for up to a year, with the amount based on the number of years service. A TD with 10 years service would get six payments of 75 per cent of their salary and two at 50 per cent of their salary. To qualify, the TD must have three years service and these payments are taxable.
When these termination payments cease, the former TD is paid a pension lump sum, equivalent to about three times the annual value of the pension. TDs’ annual pensions are based on 1/40th of a year’s salary, so a TD with 20 years in the Dáil would get a pension of 50 per cent of their salary. Additional allowances for chairing committees or acting as a whip are reckonable for pension purposes.
Members must be at least 50 to qualify for a full pension and lump sum, though reduced amounts can be paid once they are over 45.
A TD with 20 years of service would receive an annual pension of just under €50,000, a pension lump sum of €160,000, a termination lump sum of €16,400, six termination payments of €6,151 a month followed by six further payments of €4,101.
Ministers who lose their seats are entitled to severance payments for two years. In the case of former ministers such as Pat Carey and Mary Hanafin, these severance payments are worth about €88,000 each, but Mary Coughlan’s would be slightly higher because she was tánaiste. Junior ministers will get severance payments of about €46,000 each.
Ministers who retained their seats will have to forgo their severance payments as a result of a policy change by party leader Micheál Martin. This means re-elected former ministers such as Brian Lenihan, Brendan Smith and Eamon Ó Cuív will not receive the payment.
Fianna Fáil ministers who did not run for re-election will be entitled to collect the severance payment. Former Green Party ministers Eamon Ryan and John Gormley have said they will give their payments to charity or to the party. All ministerial severance payments are taxable.
The annual salary rate for TDs is €92,672, rising to €98,424 after over 10 years’ service.
Newly elected Independent TD Luke “Ming” Flanagan has said he will take a 50 per cent cut in his salary, while another Independent, Mick Wallace, says he plans to forgo the allowance paid to Independent TDs.