Loss of Office Payment paid to MPs

Request

Would you kindly advise me as to how to calculate the payments and pensions made to any MPs who may not be re-elected in the forthcoming election, or who chooses not to stand for re-election. Does it make any difference as to the calculations whether the individual choses to retire, or if he or she was not returned by the electorate.

Would you kindly explain the purpose of each element , how it is calculated and whether it is taxable. If any such payments were recommended by independent studies, please advise and provide copies (in electronic format preferably)

Please advise whether any payments are automatic payments or entitlements which may or may not be taken in full or part or indeed declined.

Does past service in any particular post, for example as Chancellor of the Exchequer, or as a Junior Foreign Minister, carry any additional 'retirement' benefit if the MP was a backbencher immediately prior to 'retirement'. If so, please explain how.

Finally, are there any conditions which attach to any of these payments, for example in relation to any new employment in areas funded from public funds.

Response

IPSA holds the information that you request.

Under reforms introduced in 2013[1], MPs will be eligible to receive a Loss of Office payment if they lose their seat at a general election. The amount of the Loss of Office payment will be equal to double the statutory redundancy entitlement.

MPs are only eligible for such payments if they have held office for a continuous period of at least two years, stand for re-election but are not re-elected. MPs who choose to stand down prior to an election are not entitled to any payment.

Loss of Office payments are only made to eligible MPs once they have:

  • issued redundancy notices to staff;

  • repaid any outstanding debts to IPSA;

  • submitted all expense claims for the period running up to the election;

  • carried out all administrative tasks; and

  • any other necessary tasks identified by IPSA.

The payments are then made in full to the MP, much like a redundancy payment[2].

As MPs do not receive any salary following the election, but are still expected to undertake work winding up their parliamentary affairs, MPs who are entitled to a Loss of Office payment can request that they are paid what would have been their full equivalent salary for the remainder of the month of the general election, which is deducted from their total Loss of Office payment entitlement.

Loss of Office payments are made to all eligible MPs regardless of any additional responsibilities or positions they have hold (or have held). Certain individuals may be entitled to additional amounts under the Ministerial and other Pensions and Salaries Act 1991, but these are not administered by IPSA. There are no conditions to the payments in relation to any future employment undertaken by the MP.

MPs who are enrolled in the pension scheme, the Parliamentary Contributory Pension Fund (PCPF), will be eligible for their pension once they reach pensionable age. You can find out more information about the PCPF on their website: https://www.mypcpfpension.co.uk/.

[1] A copy of the consultation report from December 2013 can be found on our website.

[2] Where MPs have outstanding debts to IPSA, they may have these debts deducted from their entitlement to a Loss of Office payment.

Ref:
CAS-80614
Disclosure:
9 May 2017
Categories:
WINDING UPMPs' PAY AND PENSIONS
Exemptions Applied:
None