MPs are to get a 10% pay rise of over £6,000 at a time when they have capped benefit rises to 1% over the next three years.
The inflation-busting increase - prices are only rising by 2.7% each year - means politicians will get a higher rise than the total a Jobseeker's Allowance (JSA) claimant gets in a year.
JSA pays £71.70 per week, or £3,728.40 each year, not much more than half of the MP's rise.
The coalition has capped the annual total a family can receive in benefits - no matter how many children it includes - to £26,000, while a single MP now gets £66,396 which is due to rise to £67,060 in 2014 and by another 1% after that, in addition to state-funded benefits of their own.
The pay rise, which will be phased in by 2015, will see them receive an additional £6,300 over-and-above these existing pay rises to £74,000 per year.
The amount has been set by the Independent Parliamentary Standards Authority (IPSA), which has also recommended cutting some generous MPs perks including:
- the resettlement allowance, which pays MPs of working age up to £64,766 if they lose their seats at an election. They will be entitled to a lower payment
- pensions, which will move from final salary to career average payments, saving around £2.5 million per year
- taxis home after late sittings
- meal allowances of £15, which can be spent in Parliament's state-subsidised restaurants
The meal allowance is still paid at a time when more and more unemployed people are being forced to turn to food banks in desperation.
IPSA chairman Sir Ian Kennedy said: "The history of MPs' pay and pensions is a catalogue of fixes, fudges and failures to act. The package we put forward today represents the end of the era of MPs' remuneration being settled by MPs themselves.
"For the first time, an independent body will decide what MPs should receive. We will do so in full view, and after consultation with the public."
The rise is currently a proposal, and the leaders of the Labour and Liberal Democrat parties, Ed Miliband and Nick Clegg, have said they would not accept it if it goes ahead.
The Prime Minister's spokesperson would not comment on the likelihood of David Cameron doing the same.
This view was not held by all MPs, however, with the Conservative's Andrew Bridgen telling the BBC: "I don't believe that MPs are remunerated sufficiently for the job that they do, if you want to attract the right sort of people.
"I don't want Parliament to be only for people of independent wealth, for people who treat [their salary] as pocket money."