Conservatives did not change rules to give 'fired' MPs six months wages tax-free

What is the claim?

Multiple posts on social media platforms Facebook and X (formerly Twitter) claim that the Conservative government in the U.K. has amended rules to provide six months of tax-free wages to all "fired" Members of Parliament (MPs). 

One such post read, "The Conservatives changed the rules so all fired MP's get 6 months wages tax free instead of 3 months. That is £47,000 each. But they moan about people getting £4,000 who are actually disabled. Disgusting (sic)."

Posts claiming that the Conservative government has changed rules so that all 'fired' MPs get six months of tax-free wages. (Source: Facebook/Modified by Logically Facts)

 However, we found that this claim is misleading.

 What is the truth?

MPs leaving the British Parliament are eligible for two kinds of payments: Loss Of Office Payments (LOOP) and winding-up budgets. The Independent Parliamentary Standards Authority (IPSA) decides on these payments, not the government.

The IPSA website states, "We are the Independent Parliamentary Standards Authority, the independent body that regulates and administers the business costs and decides the pay and pensions of the 650 elected MPs and their staff in the UK."

Winding-up budget

The winding-up budget was introduced in a 2018 IPSA document (updated in 2019) to help MPs wind up their offices after an election defeat. Historically, this was only available to MPs who lost their election seats in a general election or stood down at snap elections, not to those who stood down in a planned election. This payment would equal two months' net salary and would be calculated "using the prevailing MPs' salary and standard tax and National Insurance deductions."

In 2023, IPSA changed the rules for winding-up budgets. A document dated July 19, 2023, announced that the period of the winding-up budget, which was two months until the 2019 elections and two and a half months after that, was now being extended to four months. IPSA said this was because their experience showed that the time taken to close down a former MP's parliamentary and financial affairs took longer than two months.

Eligibility for receiving winding-up payments was also changed. All MPs leaving Parliament, whether they lost their seat, stood unsuccessfully in a new or different seat, or stood down, were made eligible. MPs who stood down before an election period are ineligible for this payment.

British MPs are currently paid £91,346 a year, meaning that the increased winding-up payments will be nearly £30,448 before taxes.

LOOP payments

Although payments to MPs exiting Parliament have been present since 1971, the system of LOOP payments was introduced in 2015 and was only available to MPs who contested the elections in the same seat and lost. These MPs must also have held office for two continuous years before losing the election. 

Under the revised 2023 rules, LOOP payments are available to MPs who lose the general elections from any seat but must have held office for two continuous years before that. The amount of this payment remains unchanged, equal to "double the prevailing statutory redundancy entitlement."

According to data published by IPSA, MPs received an average of £11,400 in LOOP payments after the 2019 election. 

IPSA told Logically Facts, "LOOP is calculated as double the statutory redundancy calculation. So it varies by individual, but the calculation takes into account age as well as length of service."

Claim is inaccurate, says IPSA

While an MP who loses their seat or stands unsuccessfully in a different seat will be eligible to receive a LOOP and a winding-up payment, MPs who have announced before the general election that they were standing down are eligible only for a winding-up payment and not a LOOP payment.

IPSA also told Logically Facts, "Winding-up payments and loss-of-office payments will be treated in accordance with prevailing tax legislation and HMRC guidance," adding that the claim that every "fired" MP will receive £47,000 each is inaccurate.

As LOOP payments differ for each MP and winding-up payments will be less than £30,000 post-tax, it is inaccurate to say that every "fired" MP will receive £47,000 each. 

The verdict

This claim is misleading, as winding-up payments for MPs have been increased from two months to four months, not six months. These payments are decided by the Independent Parliamentary Standards Authority and are not tax-free. The amount of winding-up payment is also not £47,000, as claimed in social media posts.

Follow Logically Facts' coverage and fact-checking of the U.K. Election here.