Annie Hoey (Labour)
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I welcome the Minister of State, Deputy Noonan, to the House.

Gerard Craughwell (Independent)
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The Minister of State is very welcome to the House. He will be aware that I have spoken on issues relating to my electorate, county councillors, for many years.I am delighted to see some of them present in the Public Gallery having travelled all the way from Donegal over the mica issue. It is something we have to take on board. It is not for the good of their health that these people travelled for three and a half hours to get down here and will spend the same amount of time travelling back home.

Today, however, I wish to raise the issue of the ambiguity that exists in the gratuity of county councillors. The situation is clear if a county councillor served as such from 2020 to 2023, 2024 or whenever the next election will be. Such councillors know exactly what are their entitlements. For councillors who served on both a town council and a county council, where a dual mandate was held, again, the situation is clear and they know exactly what are their entitlements. Their entitlements are four twentieths, or one fifth, of the representational payment. I have always had a difficulty with the title "representational payment" because, as the Minister of State will know, we have representational payments here in the Oireachtas and they are an entirely different thing from what is given to county councillors. It should be called a salary but that is an argument for another day.

The ambiguity arises where a member of a local authority was a member of a town council for ten years, let us say. We lost all the town councils in 2014. That is a decision the Minister of State might revise and reconsider because many towns are dying due to the lack of a town council. We have finished up in a situation where there is a lack of certainty in respect of the entitlement for a person who had a single mandate on a town council and subsequently went on to a county council and finished in 2024 or 2023. I want to put certainty in place and I hope the Minister of State can assist me in that regard.

First and foremost, there is ambiguity with regard to the representational payment. Is it the current one or the previous one? In the public service, we always deal with the current, so the gratuity should be based on the representational payment of €25,000-odd that is there today and there should be no ambiguity whatsoever in that regard. The issue of taxation is an individual one and I will not get into it. Those who were both a county or city councillor and a town councillor know they will be given the county councillor's rate of gratuity. It is the other group in which I am most interested, and I hope the Minister of State can shed light on that issue today.

Malcolm Noonan (Carlow-Kilkenny, Green Party)
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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.

Gerard Craughwell (Independent)
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I came in here with some degree of hope. I am going out more depressed than I came in. We are creating a dangerous precedent. The public service has always been based on the fact that when staff come to retire, they get a lump sum based on current salary. I am mindful of my career, where I started work as a private soldier and will finish on the single pension scheme as a teacher. At the end of the day, my entitlement to a pension will not be directly differentiated from that of any other member of the public service. Provided I was three years in the job, I will get the lump sum and pension of a teacher.

When we allow chinks like this to take place, whereby a representational payment can be based on €18,000, it is a dangerous precedent and one that could find its way filtering through to other sectors of the public service. We have to remember that it is not just county councillors who do not make a contribution to their pension. Many roles make no contribution; it is part and parcel of their salary.

We have to sit down and look at this. Sadly, in the case of PRSI, along with five county councillors, I had to take a court case to get the PRSI class K removed from county councillors and get them moved to class F. We were not generous enough to make that retrospective. This is an important issue.

From the point of view of our local authority members, I do not know why anybody would go into the role anymore. We are stripping powers from them and will not treat them in the same way as other public servants when it comes to their representational payment. I appreciate this is not the doing of the Minister of State, but he has it within his remit to make moves to try to fix this and treat these people in a decent way.

I am happy to see that there is no differentiation between town and county councillors. I assume all councillors will retire on the same level of representational payment.

Malcolm Noonan (Carlow-Kilkenny, Green Party)
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I thank the Senator for his continued advocacy for the rights of councillors. I welcome the engagement between the AILG and my Department. The Minister of State, Deputy O'Donnell's, predecessor, Deputy Peter Burke, moved swiftly to implement the Moorhead report once a Government was formed.That was welcomed across the elected members. The role of elected members is critically important, especially at local level. This is not to say powers have been stripped. We are putting in additional layers of responsibilities with our local authority members in the areas of climate, biodiversity and urban development. This is a whole new set of tasks and challenges that local governments are facing. We want to see robust local government. We want to see elected members being valued in their communities and to ensure their remuneration and gratuity upon retirement is reflective of the incredible work they do for local communities.

Annie Hoey (Labour)
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I welcome the visitors to the Public Gallery.