Daniel Andrews Entitled to $300,000 Yearly Pension After Quitting Politics: Report

Victorian Premier Daniel Andrews addresses the media during a press conference in Melbourne, Australia, on Jan. 11, 2022. Diego Fedele/Getty Images

Former Victorian Premier Daniel Andrews will likely enjoy a lifelong pension of over $300,000 a year as he retires.

The longest-serving Victorian premier suddenly announced his retirement on Sept. 26 with his last official working day a day after.

The move caught the public off guard as Mr. Andrews had previously committed to serving a full third term if re-elected.

While heated debates about his legacy continue, reports have emerged about how much Mr. Andrews will earn after leaving the office.

According to the Herald Sun newspaper, the former premier could receive more than $300,000 (US$194,000) a year under the current superannuation scheme for MPs.

The estimated generous annual remuneration is a result of his 21 years serving as an elected member of the Mulgrave electorate district, as well as being the leader of the Labor Party for 13 years and nine years as the premier.

While the pension is a big step down from Mr. Andrews’s premier salary, it is much higher than the basic pensions of other MPs, which range between $99,000 to $149,000 a year.

Mr. Andrews used to be the highest-paid premier in Australia, with an annual salary and expense allowance of $481,190 and $60,480 respectively, as of July 2023.

It is also worth noting that the former premier, who is 51 years old, can still look for other jobs after retiring from politics, and his pension package will not be affected by his post-office employment.

Victorian MPs’ Superannuation Breakdown

Under current laws, there are two superannuation systems for Victorian MPs.

Existing and former MPs elected before Nov. 10, 2004, are required to contribute a portion of their parliamentary salary to the Parliamentary Contributory Superannuation Fund each year.

The contribution amount is fixed at 11.5 percent of the MP’s basic salary.

However, those holding specified parliamentary positions are required to make extra contributions as they earn the additional salary from those roles.

The value of the pension for an MP who does not hold any specified parliamentary offices ranges from 50 to 75 percent of their basic salary (around $99,000 to $149,000), depending on the length of their service.

Victorian Premier Daniel Andrews arrives ahead of the Labor caucus meeting at Victorian Parliament House in Melbourne, Australia, on Sept. 27, 2023. Asanka Ratnayake/Getty Images

Former MPs who meet certain eligibility requirements can receive an annual pension after leaving the office regardless of their age. They can also opt to convert all or part of their pension to a lump sum payment.

A reduced pension may be paid to an MP’s partner or eligible children in the event of death.

Former MPs who are not eligible for a pension will receive a lump sum payment of up to 3⅓ times their contributions after leaving their posts.

Meanwhile, existing and former MPs elected after Nov. 10, 2004, do not enjoy a lifelong pension.

Instead, each year, the state pays them a contribution that is equal to or greater than 15.5 percent of their basic salary to a superannuation fund of their choice.

In addition, they will receive a separation payment after leaving Parliament, which is equal to three months’ basic salary (around $45,000) for an MP who has served one term and six months’ basic salary (around $91,000) for an MP who has served two or more terms.

Some former politicians have defended the generous superannuation schemes for MPs.

Former Labor MP Luke Donnellan said MPs generally work more hours than most people and often struggle to find jobs after exiting politics.

“You’ll find that a lot of members of Parliament will struggle to get work thereafter because they’ve been tainted as politicians,” he told 3AW Radio.

“Many of these people have got good skills but I don’t think they’re actually recognised. So for many, and I know many very sharp politicians who spent a year-and-a-half, two years trying to find a good job thereafter.”