MPs get 1.9 per cent pay rise

MPs are set to get a salary bump and a lump sum windfall in time for the summer holidays. Photo / Mark Mitchell

MPs will receive a 1.9 per cent pay increase, the Remuneration Authority confirmed this afternoon.

The salary increases are deemed to have come into effect on July 1 this year meaning MPs will receive back pay for the last six months. That works out to $1400 for backbench MPs and $3895 for the Prime Minister.

The increase takes a backbench MP's base pay from $141,800 a year to $144,600 while Prime Minister John Key's pay goes from $411,510 to $419,300.

Opposition Leader David Shearer's base salary rises from $257,800 to $262,700.

In a statement, the authority said MPs pay had not kept pace with increases in the cost of living or with general wage movements.

That was partly at the request of Parliament and partly down to the authority taking into account "adverse economic conditions".

Since 2009 general salaries and wages had risen by 5.6 per cent while parliamentary salaries excluding the $2000 and $5000 increases to make up for he loss of travel perks, had risen by only 2.9 per cent, the authority said.

The increase announced today, "still leaves members of Parliament receiving lower remuneration increases than the general population".

MPs also received a one per cent increase in the tax free allowance they get for entertaining visitors, gifts, donations and other sundry purposes.

That means the prime minister's tax free allowance rises to $21,600, and MPs' allowance goes to $16,200.

The authority also released its salary determination for judges, giving them a 2.5 per cent increase in base salary.

That sees a High Court judge's base pay rise to $395,000 and a District Court judge's salary rise to $300,500.

Those increases are effective from October this year.