Revised Green Book and audit of Members' allowances - Members Estimate Committee Contents


PART II THE ALLOWANCES 1. PERSONAL ADDITIONAL ACCOMMODATION EXPENDITURE (PAAE)

PURPOSE OF THE ALLOWANCE

The PAAE is available to reimburse Members for the additional expenses necessarily incurred in staying overnight away from their main home for the purpose of performing their parliamentary duties. It may only be used to meet the following costs:

  • Rent or mortgage interest
  • Hotel expenses
  • Utilities and telecommunication charges
  • Furnishings
  • Maintenance, service agreements, cleaning and insurance
  • Subsistence.

ELIGIBILITY

PAAE can be claimed if the principles set out in Part I have been complied with, and

  • If your main home is in the constituency, for overnight stays in London.
  • If your main home is in London, for overnight stays in the constituency.
  • If your main home is neither in London nor the constituency, you can choose in respect of which of these areas to claim PAAE.

For these purposes, "constituency" is regarded as any point within 20 miles of the constituency boundary.

PAAE may also be claimed if a Member performs parliamentary duties in an area of his or her constituency where a stay overnight is reasonably necessary in view of the distance from his or her main home.

Members representing inner London constituencies are not eligible to claim this allowance. Instead, there is an automatic London Costs Allowance (LCA) that is paid with salary.

Members representing constituencies outside inner London can choose between receiving the LCA and the PAAE. A choice may be altered no more than once a year.

EXAMPLES OF APPROPRIATE EXPENDITURE

The following provides examples of expenditure which are appropriate under various categories mentioned above.

Whilst these examples are not exhaustive, they are designed to indicate the types of costs that are appropriate and so guide Members for other expenditure they wish to incur which is not on this list.

RENT OR MORTGAGE INTEREST

In respect of one additional home in either London or the constituency:

Either

  • Rent
  • The cost of a deposit (although this must be repaid when the deposit, or a proportion thereof, is returned)

Or

  • Mortgage interest
  • Increase to mortgage costs (interest only) to pay for refurbishments; to extend the lease; or to purchase the freehold

And

  • Legal and other costs associated with obtaining (and selling) (for example, stamp duty, removal expenses, valuation fees)

HOTEL EXPENSES

  • Cost of overnight accommodation

UTILITIES AND TELECOMMUNICATIONS CHARGES

  • Electricity, gas
  • Water service charges
  • Council tax
  • Telephone, television and communications charges (mobile phone charges should be claimed from AOE)

FURNISHINGS

  • White goods (for example, refrigerator, washing machine or cooker)
  • Electrical equipment
  • General household furniture (for example, sofa, chairs, table or bed)
  • General household items (for example, cutlery or crockery)

MAINTENANCE, SERVICE AGREEMENTS, CLEANING AND INSURANCE

  • Necessary repairs to make good dilapidations
  • Decoration
  • Cleaning (services or equipment)
  • Service charge/ground rent
  • Insurance services and maintenance contracts
  • Basic security measures

SUBSISTENCE

  • A flat-rate sum of £25 may be claimed for any night which a Member spends away from his or her main home on parliamentary business. No other payment in respect of subsistence may be claimed.

ISSUES NEEDING PARTICULAR ATTENTION

FURNISHINGS

The total costs claimed in respect of furnishings in any allowance year (except the first year after a Member is newly elected) are limited to 10 per cent of the PAAE for that year.

MORTGAGE AND RENTAL ARRANGEMENTS

PAAE must not be used to meet the costs of renting a property from yourself; a partner, or family member (including a spouse or civil partner); a close business associate; or an organisation or company in which you or a family member have an interest (other than as an ordinary investor).

PAAE must only be used for mortgages taken out with a company subject to regulation by the Financial Services Authority.

Members are not prevented from taking out a joint mortgage but only joint mortgages with a Member's spouse/civil partner/partner will be fully covered by PAAE. In all other circumstances Members must contact the Department.

Members are also strongly encouraged to keep mortgage arrangements as straightforward as possible. Complicated financial products, which may make it difficult for the Department to advise Members as to their validity, should be avoided.

RE -MORTGAGING

The Department must be consulted in advance before any change of mortgage provider or to the terms of a loan.

PROPERTY USED AS AN OFFICE

The Department must be informed if PAAE is being claimed on a property and you wish to claim against AOE for any of the costs associated with an office on those premises (for example, heating, lighting, decoration, furniture). You must ensure that you do not claim twice for any element of these costs.

DOCUMENTATION REQUIRED

Members are required to provide the Department with the address of their main home when they enter Parliament by completing form PAAE1. Members must inform the Department if the address of their main home changes. This information is essential to ensure the proper assessment of a Member's PAAE and travel entitlements. Save in exceptional circumstances (on which the Finance and Services Committee will adjudicate), Members may only change the respective designations of main home and additional home once in any allowance year.

If you have a mortgage, a copy of your annual statement of interest must be provided each year to the Department. If it is not clear from this documentation what the amount of interest payable is on the property, further evidence may be required. You must also inform the Department of any alterations to the terms of your mortgage.

If you rent a property, a copy of the lease agreement must be provided to the Department. Relevant documentation must be submitted when any of the terms and conditions are revised (for example, a change in rent charges).

Evidence in the form of invoices or receipts must be provided for all items of expenditure of £25 or more. No receipt is necessary in respect of the flat-rate payment for subsistence.

If a copy of annual agreements (for example, council tax statement, service charge) is deposited with the Department, you will not need to submit invoices when claiming for relevant costs.

HOW PAAE WORKS IN PRACTICE

PAAE is a reimbursement allowance. The Department cannot pay any bill directly. You must pay bills yourself and claim relevant sums back using a PAAE2 form.


 
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Prepared 15 January 2009