Reducing the allowance paid to Independent TDs and parliamentary party leaders by 10 per cent will save €840,000 in a full year, Minister for Public Expenditure and Reform Brendan Howlin has said.

Introducing the Oireachtas (Ministerial and Parliamentary Offices) (Amendment) Bill, he said its provisions were in keeping with the Government's objective of continued stabilisation in the overall cost of the public service.

Along with the reduction in the leaders’ and Independent TDs’ allowances, the Bill also provides for auditing of the Independent TD allowance and cuts the severance package paid to ministers on leaving office.

“Greater transparency and accountability in the use of expenditure from the allowance will also be achieved and the money received from the allowance will not only be spent appropriately, but will be seen to be so,” Mr Howlin added.

The Bill “sets out an agenda of reform for the future through ensuring the transparent and accountable use of funds provided by the exchequer to support the democratic process”.

The Minister pointed out that allowances paid to committee chairs and commission members had been cut to less than €300,000 compared with €1.436 million in 2008.

Salaries for the Taoiseach had been cut by 40 per cent since 2009 and by 35 per cent for Ministers.

Mr Howlin said parties should keep the allowances paid for TDs who are no longer with the party because the electorate voted for them on the basis of party but also because it would have negative repercussions for employees “on the understanding that the funding would be available and could cause legal and contractual issues for the party”.

Fianna Fáil’s Éamon Ó Cuív said, however, that the money should follow the TD. “If a voluntary organisation lost half its members, it would not expect to receive their subscriptions on a certain day in five years’ time.”

Independent TD Denis Naughten said Fine Gael should not receive funding in its leader's allowance for the Ceann Comhairle, because "he is an independent arbitrator".

Fianna Fáil public expenditure and reform spokesman Seán Fleming said the parliamentary activities allowance, the new name for the leaders' and Independents' allowances should not be paid from the central fund but should be voted through in the House. It was wrong not to do so.

He said certain other payments, including the free postage scheme, payments to returning officers for various elections and payments to judges, should also be voted through the House.

“It is wrong that there appears almost to be a slush fund that is not discussed here,” Mr Fleming said.