Veteran New Brunswick MLAs who qualify for a pension will also get lump sum bonuses of $42,500 each if they leave office this summer under pay and benefit changes they quietly voted themselves two years ago, CBC News has learned.

"They already get generous pay and generous pension plans, so to layer on top of the cake more icing of generous severance packages just adds insult to injury," said Kevin Gaudet, of the Canadian Taxpayers Federation.

New Brunswick introduced limited severance packages called re-establishment allowances in the mid 1990s for MLAs who lost their seats before reaching the eight years required to qualify for an MLA pension.

'Wouldn't it be nice in the private sector if we could all choose to retire and require our employers to give us a great big sugaring off cheque after we quit? The fact is we can't — and nor should they.'—Kevin Gaudet, Canadian Taxpayers Federation

The money was meant to help ease former members back into the workforce and paid a maximum of $27,000.

But in 2008, current MLAs voted to increase the maximum payment to $42,500 and to make the allowances available to everyone - even politicians who quit or retire on a full pension.

The MLAs also voted themselves a controversial 85 per cent increase in their pension benefits, giving themselves one of the richest political plans in the country.

"Wouldn't it be nice in the private sector if we could all choose to retire and require our employers to give us a great big sugaring off cheque after we quit? The fact is we can't — and nor should they," said Gaudet.

Could cost taxpayers up to $1 million

More than two dozen senior MLAs are eligible for the new re-establishment allowances, which could mean a bill of up to $1 million for taxpayers when the legislature dissolves in August.

Five of the veteran MLAs who qualify have already announced they will not be seeking re-election in September, including Liberals Roly McIntyre, Stuart Jamieson and Joan MacAlpine-Stiles and Conservatives Tony Huntjens and Jeannot Volpe.

Two other long-serving MLAs who recently quit their jobs to take Senate appointments have both already collected money under the new program, although their amounts were cut in half because they left early.

New Brunswick Conservatives Percy Mockler, who was appointed to the Senate in December 2008, and Rose May Poirier, who was appointed earlier this year, were each paid $21,250 in re-establishment allowances even though both resigned and had higher-paying and more secure positions waiting for them in Ottawa.

The re-establishment payments were recommended by a commission that reviewed MLA compensation in 2007, said the clerk of the legislature, Loredana Catalli Sonier.

The commission, headed by the province's conflict of interest commissioner Justice Patrick Ryan, did recommend expanding the allowances, but only to MLAs who qualify for a pension but leave office long before retirement age, such as former premier Bernard Lord.

"I fail to see the logic of excluding persons to whom a pension may be payable in the distant future," wrote Ryan.

But the MLAs decided on their own to make the allowances universal when they voted on a series of pay and benefit changes in April 2008.

Ten of the amendments were specifically listed by then-government house leader Michael Murphy during first reading of the bill containing the changes, but he skipped over the section that created the new departure allowances for veteran MLAs and it went unreported until now.

"We don't normally list all changes," said Catalli Sonier.

Pension increases may be reviewed

MLAs hiked their base salary to $85,000 from $45,757 and terminated two tax-free allowances that previously were used to supplement their incomes.

As a result, MLA pension accounts were flooded with millions of dollars because the expense allowances had not been part of the pension plan, prior to being converted into salary.

The New Brunswick plan now pays a $30,000-a-year pension after eight years of service, up from $16,500 and $76,000 after 20 years, almost double the previous $41,000 under the old guidelines. All pension amounts are fully indexed to inflation, up to six per cent per year.

The change was meant to be temporary, pending an outside review. But CBC reported last month that the MLAs had decided not to strike a commission to review their pension plan.

A legislative committee has since opened the door to having an independent panel review the contentious plan.

On March 18, the Standing Committee on Legislative Administration gave Speaker Roy Boudreau and Catalli Sonier one month to study independent panels used in other jurisdictions to examine MLA pensions.