Government cuts ministerial pensions by 25%

THE Government will cut ministerial pensions for serving politicians by 25%, ending a two-month debacle over the issue.

Finance Minister Brian Lenihan announced last night the Cabinet had approved the cut and legislation to implement the move will be passed before the Dáil summer break.

Under current rules, former taoisigh who still serve in the Dáil or Seanad are entitled to receive 100% of their pension, while former ministers are entitled to receive 50%.

The change will affect 33 politicians, with former taoiseach Bertie Ahern set to be the biggest loser as he will now be stripped of a quarter of his €111,000 pension – or about €27,750 – until he retires from the Dáil. Mr Ahern will be able to take comfort, however, from the fact he will still receive his TD’s salary of €106,000 on top of the €83,250 in pension payments which will survive the cut. For former ministers affected, the cut will be less severe.

As they can only receive 50% of their pension while still serving in the Dáil or Seanad, the 25% cut will equate to just 12.5% of their overall pension entitlement.

For example, Labour TD and former minister Ruairi Quinn is currently in receipt of €46,852 a year in pension payments, which equal half his overall pension of €93,700. Mr Quinn will lose 25% of €46,852 – or €11,713, which is 12.5% of the overall pension he will receive upon retirement from the Dáil. The Government’s decision ends two months of controversy over the issue, after Mr Lenihan signalled in the April 7 budget that he was ending the practice whereby former ministers still serving could claim their pensions.

“The arrangement whereby former ministers are paid ministerial pensions while they are still members of the Oireachtas will be discontinued,” he said in budget the speech. But in what was seen as a major U-turn, the Government subsequently announced the move would only take effect from the next general election, saying existing pension recipients could not be stripped of their entitlements.

After criticism, the Government revisited the issue, sought legal advice from the Attorney General and decided a 25% cut could be pushed through on existing recipients – resulting in last night’s announcement.