Former Cork city councillors’ paid out more than €1.5m in gratuities

Cork City Council paid out more than €1.5m in gratuities to former councillors who had retired or had failed to be re-elected over the past 16 years —with some receiving payouts in the region of €80,000.

Between 2009 and 2024, the council paid a total of €1,522,635.27 to 38 outgoing councillors, an average payment of €40,069.35 each.

While information was provided to The Echo following a Freedom of Information (FOI) request, Cork City Council withheld the amounts paid to individual councillors.

Although monies paid to representatives come from the public purse, the council stated: “The information relating to the financial affairs of individuals is considered personal information”.

Qualify

To qualify for a payment, former councillors must have served at least two years on a local authority, and must have reached the age of 50.

Where a councillor loses their seat or retires before the age of 50, their gratuity is preserved until they reach 50 and paid at the councillors’ annual payment rate at the time the gratuity falls payable.

The retirement gratuity is non-contributory, so no deductions are taken from their salaries, and payments are subject to taxation, including PAYE and PRSI. There is no pension scheme for councillors, and the gratuity, introduced 25 years ago, is paid instead.

Up until changes were introduced last June, a councillor with 20 years’ service would get a maximum payment of €77,816, before tax, once they left office.

Under the new system, in which the level of the gratuity is linked to the higher salary for councillors that was introduced in recent years, outgoing councillors with 20 or more years’ service now receive a maximum pre-tax payment of €90,822 once they leave office.

Calculated

According to the Department of Housing, Local Government and Heritage, under the old system, the gratuity was calculated by multiplying councillors’ historical representation payment rate of €19,454 (adjusted in line with pay increases since 2021), by the number of years they had served, multiplying that figure by four, and dividing by 20.

Thus, immediately prior to the changes in June 2024, a councillor who had served one five-year term would have been entitled to a maximum gratuity of €19,454.

Under the new system, the gratuity is calculated by multiplying the current councillor’s annual remuneration by the years they have served, multiplying that figure by three, and dividing by 20.

When the new scheme was introduced last June, the figure was calculated on the then annual remuneration of €29,978, giving a maximum of €89,934, but since October, councillors’ remuneration payment is €30,274, giving the current maximum gratuity of €90,822.

Since October, under the new system, a councillor who served one five-year term is now entitled to a gratuity of €22,705.50.

The list of former councillors receiving gratuities from Cork City Council includes a number of former lords mayor, and former and current TDs.