Commission says No for Now to ‘goodbye payment’

Public office bearers must ensure through proper financial planning that their finances are in order and cater for a possibility that they might not be re-elected into public office and as such lose the attendant income.

This message can be taken out of the latest recommendations of the Independent Commission for the Remuneration of Public Office Bearers. The Commission released its 2013/14 recommendations yesterday and included in these a response to a proposal of a ‘goodbye payment’ to non-returning office bearers. The proposal of this ex gratia goodbye payment appeared to have been premised on an apparent precedent set in 2008 and 2011.

The Commission’s statement noted that “Following the publication of the Commission’s recommendations on 17 April 2008, Legislative Sector Forum made representation to the President for the payment of a “once-off gratuity” to a Member of Parliament or Provincial Legislature at the end of a term in the instance where such member is not re-elected following an election.”

Back then “The President forwarded the request to the Commission for consideration. Following a consultation process with the Minister of Finance, the Commission concurred to the payment of ‘once-off gratuity’”.

“On 15 October 2008 the Commission made a recommendation on the payment of a ‘once-off gratuity’ for a member of Parliament or Provincial Legislature who has served five years or more and whose term of office has ended be entitled to “once-off gratuity” equals to four months pensionable salary for every five years of service or pro rata of the five year period. The Commission’s recommendation was endorsed by the President determinations as published on 12 November 2008.”

The Commission further noted that in May 2011 it was approached by the minister of cooperative governance and traditional affairs (Cogta) and South African Local Government Association (Salga), with a proposal of a once-off gratuity payment for non-returning councillors. This came after the 2011 Local Government elections. “The gratuity benefit at the time was motivated as remuneration needed by non-returning Councillors to ‘bridge’ their remuneration shortfalls and consequent financial constraints following their non-election, whilst making alternative employment arrangements or waiting for the processing of their retirement benefits.”

The Commission noted that in considering the 2011 proposal it consulted with various relevant stakeholders. Back then, the Commission was assured by the Minister of Finance that such gratuity was affordable, and agreed to the request.”

“On 29 August 2011 the Commission recommended to the President a “once-off gratuity” for non-returning Local Councillors who have served a full term from 01 March 2006 to 18 May 2011 should be paid a once-off gratuity of three months pensionable salary from National Fiscus. The Commission’s recommendation was endorsed by the Minister of Cogta on 06 December 2011. The stakeholders within local government were informed of the payment of once-off gratuity through Departmental circulars dated 17 February 2012 and 27 March 2012.”

Then came the latest proposal. The Commission said “On 15 July 2013 the National Department of Traditional Affairs and National House of Traditional Leaders made the presentation to the Commission on “Ex-gratia” payment for traditional leaders serving in various houses of traditional leaders.”

Their submission indicated that currently there is no uniformity in respect of the payment of gratuities to traditional leaders serving in the various houses of traditional leaders at the end of their term. Such payments are largely dependent on the discretion of the relevant authority. Furthermore, there have been instances where members would receive “Ex-gratia” payments from both the National and Provincial House of Traditional Leaders.”

The Commission said “at its recent meeting held on the 14 September 2013 resolved that the payment of ‘once-off gratuity / ex-gratia’ is not a benefit arrangement that should feature as part of its recommendations. The Commission could not at this stage motivate such benefit arrangement as presumably future non-returning public office bearers would ensure, through proper planning, that their financial affairs are in order at the time of their possible non re-election to Parliament, Legislature and National and Provincial House of Traditional Leaders.”

The Commission added that “Whilst a precedent appears to have been established for the payment of ‘once-off gratuity / ex-gratia’ benefits payable to members of Parliament, Legislature and National and Provincial House of Traditional, as well as to Local Government Councillors. Circumstances at the time were different, for example, the retirement arrangements in place for public office bearers in 2008 were substantially different to those in place currently.”

The Commission said it “could consider such request in future, if properly motivated by stakeholders, and subject to proper and full consultation with the Minister of Finance for purposes of establishing affordability.”

This and other recommendations have been submitted to the office of the president and parliament.

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