Section 142 of the Local Government Act 2001 and the subsequent Local Authority Members (Gratuity) Regulations 2002 -2006 provide that , subject to certain conditions, a councillor who ceases to be a member of a local authority is entitled to receive a gratuity at, or after, the age of 50.
Where a person ceases to be a member before reaching the age of 50, whether voluntarily or as a result of failure to be re-elected, the gratuity will be paid when the person reaches 50 and will be based on the representational payment applicable at that point. The Local Authority Members (Gratuity) (Amendment) Regulations 2006 allows the gratuity to be paid before age 50 , where retirement is due to permanent infirmity or where the member dies in office.
There is an overall limit of 40 years’ service for the gratuity and ex gratia payment combined, with the service reckoned for the purposes of a gratuity calculated first and the residual number of years being used to calculate any ex gratia payment. Severance payments, of a type provided for in the ministerial and Parliamentary Offices Act 1938 (as amended), are not paid to any person who ceases to be an elected member of a local authority.
Having regard to the democratic process, it is not possible for local authorities to forecast the number of current elected members who will retire or fail to retain their seats following the forthcoming local elections. In this context, local authorities are expected to be prudent in making a provision for potential gratuity payments in their annual budgets as part of the normal budgetary process.