He confirmed the move in a letter to council chief executives in recent days.
Under the existing pay and expenses system, councillors based outside of the four Dublin local authorities, Cork City Council, and Galway City Council receive an unvouched “fixed allowance” of between €2,286 and €2,667 per year to cover reasonable non-travel or subsistence expenses.
Under reforms sought by Mr Coveney and a number of senators, the system is due to be replaced by a more transparent vouched process.
The new system, expected in April, will allow councillors vouched expenses of up to €5,000 a year, while a new “municipal district allowance” of €1,000 per year will also be made available.
The council letter, seen by the Irish Examiner, says the new expenses regime is being sought to bring local authority rules into line with those of the Dáil and Seanad, while the €1,000 allowance “reflects the additional work carried out” by councillors in recent years.
A spokesperson for Mr Coveney last night said the measures are part of ongoing Government expenses system reforms “that have been in discussion for a while” and that “all senators have been campaigning for it also”.
The change is likely to draw fresh attention from potential rivals in any future Fine Gael leadership battle due to the role councillors could play in the contest.
Under Fine Gael’s party rules, TDs, senators, and MEPs hold 65% of all votes, while any candidate can only run if they have been nominated by at least 10% of this cohort. However, 25% of votes are also held by ordinary members and 10% by councillors, placing extra focus on the expenses reform plans.