Thursday, December 9, 2010

Axing Biffo's Bunch will cost over €6m


Voting Fianna Fail out of Government will cost the taxpayer in excess of €6m in golden handshakes and pension payments in just two years.

And if all members of the current cabinet and ministers of state manage to get re-elected into opposition, it will cost us another €2.3m in severance payments.

The platinum pension and termination schemes enjoyed by our TDs mean that they will not be stuck for a euro or two to pay for their electricity or gas bill when the post-election chill sets in.

While the nation freezes - both literally and financially - the Fianna Fail TDs heading into battle can look forward to a pot of gold at the end of the rainbow if their battle fails.

If the recent opinion polls are anything to go by, Fianna Fail could lose as many as 30 seats.

For every TD who loses their seat in the election - they are entitled to four financial windfalls.

Each TD will get a termination lump sum and over a period of 12 months, they will receive termination payments. This is a form of severance payment for them being voted out on their ears.

The termination lump sum, which is not subject to tax, is the equivalent of about two months salary.

The termination payments depend on how long the TD has served in the Dail.

It can range from €5,791 for a TD with just three years experience to over €61,000 for a TD who has 20 years or more service.

Once the termination payments have been paid, then the pension kicks in.

Pensions are calculated on the length of time served. Basically, the TD gets one fortieth of their salary per year of service. Serve is capped at 20 years.

So a TD with 10 years service would be entitled to an annual pension for the rest of their lives of €24, 606 while a TD with 20 years service gets the top pension - almost €50,000 a year.

If a TD has served on a Committee or held any other type of office during their time in politics, they can accrue extra pension payments based on the positions held.

On top of the pension, they are entitled to a tax-free pension lump sum, which is calculated at three times the annual pension. This gives long-timers a windfall of up to €150,000.

While no one knows which members of Fianna Fail will lose their seats at the next election - one thing is for sure, there will be a large group of them.

If, for example, 30 TDs go - 10 of which have more than 20 years service, 10 with 15 years service, five with ten years service and five with three years service - the final bill to the taxpayer after two years will be €6.2m.

And this does not take into account the annual pensions that will be paid to the losing TDs for the rest of their lives.

A severance system also exists for politicians who are re-elected but who go from ministers to backbenchers.

Under 1992 legislation, ministers who lose their jobs are entitled to severance pay.

The severance payment is paid over a two year period.

For a Minister, severance would be €98,844 over a two year period and for a Minister of State it would be €46,578 over two years.

The Tanaiste would get €115,782 and the Taoiseach would get €135,792 over two years on severance.

So assuming that all of the cabinet and junior ministers - including the Ceann Comhairle and the Leas Ceann Comhairle - are re-elected into opposition, the total amount the taxpayer would be paying them in severance over two years would amount to more than €2.3m.

This €2.3m would be paid to them ON TOP of their Dail salaries.

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