Councillors elected to the Dail last year were paid an average lump sum of €34,300 by cash-strapped councils simply because they were resigning their local authority seats.

The "retirement gratuities" were made despite the councillors taking up the lucrative positions in the Dail, where the starting salary for a TD is €92,000 a year.

Payments were also made to councillors elected to the Seanad, where new senators get more than €65,000 a year.

An Irish Independent investigation shows that councils which are reducing services to the public, paid more than €750,000 last year to 17 TDs and five senators who resigned their council seats.

Fine Gael Sligo TD Tony McLoughlin, received one of the largest gratuities – he was paid more than €53,000 euro.

Ballaghaderreen based Labour councillor John Kelly received 24,000 euro in a gratuity payment as he took up a seat in the Seanad. While Sinn Fein deputy for Sligo Leitrim Michael Colreavy received almost 39,000 euro in a gratuity payment after serving on Leitrim county council.

The gratuity sums are taxable and based on years of service in local authorities.

The payments were introduced by the Fianna Fail/PD government in 2002 as compensation for the lack of pension for councillors, who get part-time salaries.