It also sets a basic allowance for MPs and determines their superannuation.
Some recoverable work-related expenses are set by the Authority, a responsibility that is shared with the Speaker (for MPs) and by the minister responsible for Ministerial Services (for ministers).
Information on the current remuneration is in the following determination, which was notified in the New Zealand Gazette on 18 December 2020. It is effective from 18 October 2020 and expires at the end of polling day for the next general election.
Information on the current superannuation is in the following determination, which applies to MPs who are not contributors to the parliamentary superannuation scheme under the Government Superannuation Fund Act 1956:
If MPs contribute to a personal superannuation scheme, an ‘employer’ contribution is made based on an ordinary member’s salary. An ordinary member is an MP who holds no other office in respect of which a salary is payable under the Members of Parliament (Remuneration and Services) Act 2013.
For MPs elected before 1992, who have served consistently since that date, there is an entitlement to membership of the Government Superannuation Fund (GSF) scheme, which provides for a pension on leaving Parliament that reflects years of service.
MPs elected after 1992 are entitled to a contribution which is paid as a lump sum when the MP leaves Parliament. The scheme can be a KiwiSaver, master trust or registered personal superannuation scheme.
The Remuneration Authority Act 1977 says that the maximum amount that can be paid as a superannuation subsidy in any one year must be the same for all MPs.
Where members choose not to contribute to superannuation, no additional remuneration is paid.
The 2020 Determination sets out the accommodation services within New Zealand for MPs and the travel services within New Zealand for MPs’ family members. It is effective from 18 October 2020.
In 2020 the Authority changed the commencement date of the above determination to 18 October 2020, being the day after the 2020 General Election.
The reimbursement of specific employment-related costs to MPs is provided for in the Members of Parliament (Remuneration and Services) Act 2013.
Three organisations have responsibility for setting the rules for and the level of these payments. These are the Remuneration Authority, Parliamentary Service and Ministerial Services. All three are required at least once in each parliamentary term to review and publish the arrangements they are responsible for setting.
The Remuneration Authority is responsible for setting:
The accommodation and travel services that are set reflect the unique employment arrangements faced by MPs who travel extensively to engage with constituents, civil society groups and businesses, and are also required to be in Wellington for a considerable period of the parliamentary year whilst maintaining homes and community links elsewhere.
When it sets MPs' salaries the Authority assesses any personal benefit members on average receive from the provisions and takes this into consideration when establishing the level.
The Authority also sets an allowance for MPs to cover out of pocket expenditure such as entertainment of visitors, staff, constituents and officials, koha, memberships, sponsorships and fees. The latest Parliamentary Salaries and Allowances Determination has details of items covered.
This allowance recognises the costs that fall on MPs because of their representative role, and which it is neither administratively efficient nor possible to deal with on a reimbursement basis. Inland Revenue is consulted each year to confirm the continuance of a tax free status which flows from the fact that MPs do not gain personal benefit from the expenditure.
The main acts governing remuneration for MPs are:
Amendments made in December 2019 to the Remuneration Authority Act 1977 require the Authority to link its review of MPs’ remuneration to the electoral cycle, so that its determination sets out MPs’ salaries for the entire term of Parliament in four tranches. For a Parliamentary term, the periods for which MPs’ salaries must be set are as follows:
The Act also requires the Authority to begin its review of the MPs’ salaries and allowances within three months from the return of the writ after a general election. The review must be based on the information that is available to the Authority at the time of the review.
For the review, the Authority must consult the Speaker of the House and the Minister Responsible for Ministerial Services and all MPs are invited to provide the Authority with any comments that they may wish to make on their salaries and allowances before finalising its determination.
This timetable means that the Parliamentary Salaries and Allowances Determinations are normally released late in the election year or early the following year and are backdated to apply from the day after the most recent polling day. The explanatory memorandum appended to the determinations provides more detail of the Authority’s approach.
If during the term of a determination new facts, information or matters arise the Authority can amend the determination if it considers at the time that the matters meet the statutory criteria to warrant a change.