Malcolm Noonan (Carlow-Kilkenny, Green Party) | Oireachtas source

As a former councillor who served both on a borough council, for ten years, and a county council, for 16 years, I agree with the sentiments expressed by the Senator in respect of the reinstatement of town councils. It is a matter for another day but they served a particular function, particularly in respect of the urban agenda, and would have a role in the context of the challenges local government is facing on climate and other issues. I agree with the Senator. It was a mistake to abolish them.

I thank the Senator for raising the issue of the councillor retirement gratuity. I appreciate the opportunity to address the House on the matter. Unlike Oireachtas Members, there is no provision for councillors to be part of the single public service pension scheme. The current arrangements for lump sum gratuity payments for retiring councillors, therefore, are unique. The terms of the gratuity payments to councillors are set out in the provisions of the Local Authority Members (Gratuity) Regulations 2002-06. As the gratuity is non-contributory, councillors incur no deductions from salary payments towards their gratuity lump sum. Any period of service as an elected member of a local authority from 4 May 2000 reckons as service for the purposes of the gratuity, subject to a maximum of 20 years' service.

The calculation of the gratuity is based upon the representational payment that was in place when the principal regulations were given effect in 2002. At that time, said payment was worth €11,000 per annum. Through the subsequent years, the representational payment has been adjusted in proportion to any adjustments made to the salary of a Senator. The annual accrual rate towards the gratuity lump sum is calculated as four twentieths of the adjusted representational payment for each year of service up to the maximum of 20 years' service. This provides for a maximum gratuity payment worth 400% of the adjusted representational payment after 20 years' service.The adjusted representational payment is currently worth €18,790 and, therefore, the maximum gratuity lump sum is €75,160. This is due to be increased by 2% from 1 March 2023 to match an increase due to the Senator's salary from the same date as a result of the revised national pay agreement. The principal regulation provided that the gratuity becomes payable on retirement from local government service and having reached 50 years of age.

When a person ceases to be a counsellor before the age of 50, the gratuity will be preserved until the age of 50 and will be based on the amount of the adjusted representation payment on that date. A report of the independent review of the role and remuneration of elected members, overseen by Sarah Moorhead SC, was published in June 2020. The report set out a number of recommendations to reform and rebalance the financial supports for councillors away from expenses and allowances in favour of a more normal taxable salary to income.

On 18 May 2021, a Government decision approved a proposal on the reform of financial support for councillors that took account of the recommendations of the Moorhead report and subsequent feedback received from councillors and their representative bodies, as well as engagement with the Department of Public Expenditure and Reform. On 1 July 2021, new regulations were given effect to implement the Government's decision. This included the introduction of a new salary-type annual remuneration payment for councillors into any local authority employee timescale. The annual remuneration payment is currently worth €27,593 per annum and will increase by 2% from 1 March 2023 in line with the revised national pay agreement. The annual remuneration payment is not linked to the calculation of the gratuity as the Government's decision did not provide for, nor was there any increase to, the gratuity recommended in the Moorhead report.

My Department is engaging with council representative associations on the current terms of the gratuity payable to councillors, which I acknowledge is a matter of considerable interest to them. I understand an analysis of councillors' views and needs in this regard has been undertaken by the AILG, which will be of assistance to the Department when completed. Any adjustment in the existing terms of the gratuity will require new regulations to be made with the consent of my colleague, the Minister for Public Expenditure, National Development Plan Delivery and Reform.