Kevin Rudd and Stephen Smith to keep part of their pensions plus six-figure salaries as ambassadors

Australia’s new US ambassador will be double-dipping on the taxpayers’ dollar, cashing in a hefty six-figure salary on top of his post-parliamentary pension.

Exclusive: Kevin Rudd will be double-dipping on the taxpayers’ dollar in his new role as Australia’s US ambassador, putting his income almost on par with Prime Minister Anthony Albanese.

The former prime minister and his ex-Labor colleague Stephen Smith – appointed as Australia’s new High Commissioner to the UK – are the latest retired MPs to cash in lucrative six-figure salaries as diplomats on top of their post-parliamentary pensions.

While the Department of Foreign Affairs and Trade would not confirm their individual wages in the prestigious overseas posts, it is understood the pair will be paid at the top end of a public service executive salary band ranging from $292,000 to $441,000.

They will also be entitled to continue receiving about half of their pensions, under a generous scheme available to MPs elected before 2004, meaning both are likely to take home at least $500,000 when they start work in Washington DC and London early next year.

Mr Albanese earns $564,000 in the nation’s top job.

Anthony Albanese with Kevin Rudd last year. Picture: Darren England

Dr Rudd’s full pension is worth an estimated $216,000 a year, according to a News Corp analysis of the complicated scheme which is based on an MP’s years of service and parliamentary and ministerial positions.

But the new job will be a significant pay cut from his position as the Asia Society’s global president, where he has earned about $US1m ($A1.49m) a year.

“He certainly doesn’t need to do this,” Mr Albanese said on announcing his appointment.

“He’s doing it out of … what he sees as his service obligation to the country that he loves.”

Prof Smith, the former defence minister, has a full pension worth an estimated $242,000. He is currently spearheading the federal government’s independent defence strategic review on a eight-month contract worth $306,496.

Under laws governing the scheme, former MPs who take on taxpayer-funded roles must have their payments halved for every dollar they earn that exceeds 20 per cent of their pension rate.

Anthony Albanese names Stephen Smith to lead Australia’s defence strategic review. Picture: Gary Ramage (NCA NewsWire)

Dr Rudd’s spokesman said: “We expect the government will apply the same rules that applied to previous diplomatic appointees including Brendan Nelson, Tim Fischer, Alexander Downer and George Brandis.”

Prof Smith could not be reached on Tuesday.

Joe Hockey and Kim Beazley, Mr Rudd’s predecessors in Washington, were also eligible for the double-dip, as were Mr Brandis and Mr Downer who served in London.

In 2015, prior to Mr Hockey taking over as the US ambassador, then-senator Nick Xenophon unsuccessfully pushed to ban former politicians who became diplomats from accessing their pensions.

Some retired MPs on the pre-2004 pension scheme elect to take lump sum payments.