Monday, September 14, 2015

Not shabby. Abbott's pension for life to top $300,000

Tony Abbott is set to go off into the sunset with an annual pension of $307,542 per year.

Although well below his prime minister's salary of $539,338, it's not to be sneezed at.

If he wants, he can take half of it as a lump sum of $1.53 million and take the rest as an annual pension worth $153,771.

Abbott has been in Parliament for 21 years. The rules stipulate that base of his pension is 6.25 per cent of the base parliamentary salary of $195,130 multiplied by the number of years of service.

For Abbott, that's 21 years, which works out at $256,000. But he won't get that much. The base of the pension is limited to 75 per cent of the parliamentary base salary, which means he'll be limited to $146,350.

On top of the base he will get extra for the time he has been a minister, the opposition leader, and the prime minister.

The extra works out at 6.25 per cent of the extra salary for each job, multiplied by the number of years he has been getting it. He was a minister for nine years, the opposition leader for four years, and the prime minister for two years. The loadings are $141,469, $165,861, and $312,208...

That makes a total top-up $161,192. Added to Abbott's base pension, that's an annual pension of $307,542.

The rules allow him to take up to half of it as a lump sum, where it is paid at 10 times the amount sacrificed. That's a lump sum of up to $1.53 million, which could come in handy. His house is still mortgaged. After losing his minister's salary in 2007 he reportedly remortgaged it in order to meet expenses.

If previous prime ministers are any guide, he'll also receive other entitlements. Kevin Rudd, Julia Gillard and John Howard each receive an extra $300,000 a year with which to maintain a staffed office, plus travel costs. If Abbott does leave Parliament, deciding what extras he gets will be one of Prime Minister Turnbull's first decisions.

In The Age and Sydney Morning Herald