MEPs pensions & payoffs!
Jan 26, 2019Posted by on
This week on Facebook: In France tax inspectors claimed that the EU pensions of a married couple (Michel Bourges-Maunoury and Marie-Louise Heinz) should be taken into account in calculating their tax liability. The couple took their case to the Court of Justice, which ruled that income paid by the EU and subject to EU tax could not be taxed “either directly or indirectly by a member state”. It also ruled that recipients were exempt from declaring the amount to national tax authorities.
Basic pension arrangements for MEPs and MPs are the same, but MEPs can also choose to contribute to an additional, and very generous, European Parliament pension scheme. They get paid a 287 euros allowance, to pay for hotels, taxis and food for every day they work in the Parliament. They are also reimbursed for weekly travel from Britain for the cost of an open economy ticket plus an allowance for distance travelled. This was worked out in an era before low-cost air travel and opponents say it can amount to a tax free bonus of £10,000 a year for each MEP. The European Parliament also pays 190,000 euros a year towards staff costs. They are also entitled to £36,000 a year to run their offices in their home countries¹.
Former Labour leader Lord Kinnock has an EU pension of around £96,000 a year after his spell as Transport Commissioner in Brussels. His wife, former Euro-MP Baroness Kinnock, receives a £67,000 EU pension. Former Labour Cabinet Minister Lord Mandelson will be entitled to claim a Brussels pension of more than £35,000 when he reaches 65. According to 2010 figures, the average annual pension for 17,471 retired Eurocrats was £57,194. In contrast, over three-fifths of single-pensioner households in Britain have an income of less than £10,000.
Yet EU retirees (EU MEPs and EU public servants) pay less taxes on their pensions largess from the EU than others in the UK, this despite an MEP’s pension contributions being non-contributory since 2009. Members of the European Parliament (MEP) and financial affairs and taxation obligations of EU public servants follow rulings by the European Union (EU)².
British MEPs departing the European Parliament because of Brexit will receive a payout worth tens or even hundreds of thousands of euros. According to a 22-page document obtained by POLITICO titled “British Members end of mandate,” the British legislators who are due to leave on March 29 can claim a “transitional allowance” of €8,611.31 per month before tax for up to two years, depending on their length of service. British MEPs to bag lucrative post-Brexit payout (2019)
1. Departing MEPs get final payoff of up to £157,000: All MEPs who step down or lose their seats are entitled to a “transitional allowance” of at least £39,000. The value of the payment increases with length of time in post, meaning the longest-serving MEPs could receive two years’ salary after leaving. The allowance provides one month’s salary for each year an MEP has been in parliament, with a minimum of six months and a maximum of 24.
2. MEPs grant guarantees to their own additional pension fund:The supplementary pension scheme, which has been in operation since 1989, comes on top of pensions that MEPs receive from their national governments. MEPs pay €1,194 a month into the supplementary scheme and the Parliament pays in double that amount, €2,388.
3. Will Taxpayers Have to Bail Out EU Parliament Pension Fund? Despite denials from Brussels, EU taxpayers are to foot the bill for hefty and legally controversial pension supplements for many members of the European parliament. Their pension fund has run up a loss of €120 million ($156 million) as a result of risky share investments, according to an internal memo of the secretary-general of the European Parliament.
4. EU pension fund faces €326.2m deficit: Paperwork seen by German newspaper Bild, said that the fund, which closed to new members in 2009, held assets worth €146.4m at the end of 2016, at which point the fund’s liabilities stood at €472.6m. The European Parliament will be responsible for the deficit if the fund does go bust, meaning it could be the European Union’s taxpayers who foot the bill. According to Bild, the estimated date of insolvency is roughly estimated between 2024 and 2026, only possible if the fund’s assets manage to generate a 2 per cent return annually.
A senior European Union source has confirmed that these so-called “transition payments”, in effect redundancy money for MEPs when they stand down or lose their seats, will be paid to Britain’s 73 MEPs. A senior European Union source has confirmed that these so-called “transition payments”, in effect redundancy money for MEPs when they stand down or lose their seats, will be paid to Britain’s 73 MEPs.