Corrupt former Labor minister Ian Macdonald faces repaying a debt to NSW taxpayers potentially worth hundreds of thousands of dollars under a move to strip him of his parliamentary pension via legislation announced by Premier Gladys Berejiklian.
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The legislation, unveiled on Tuesday, also threatens corrupt former minister Eddie Obeid with loss of his parliamentary pension under which he has been paid more than $120,000 a year since he quit politics in 2011.
The move comes just over five months after Obeid was sentenced to a maximum of five years in jail for misconduct in public office and days before Macdonald faces a sentencing hearing on Friday after being convicted of the same offence in March.
However, the government will not be able to move against Obeid and Macdonald's pension for up to 12 months after their convictions - the period within which the legislation says they can head off the action with a successful appeal.
"The corrupt actions of former Labor politicians Eddie Obeid and Ian Macdonald constitute a complete betrayal of public trust," Ms Berejiklian said.
"These changes provide a strong reminder that politicians are here to serve the people of NSW, not to serve themselves."
The legislation was flagged in December by then premier Mike Baird after Obeid's conviction in relation to lobbying over commercial leases at Circular Quay in which his family held an interest.
Mr Baird also said Mr Obeid would be forced to repay more than $280,000 in legal assistance he was given for representation at the Independent Commission Against Corruption inquiry that preceded his conviction.
The legislation means that MPs convicted of a serious offence during their time in office will lose their parliamentary pension - except for personal contributions - even if they quit before charges are laid.
Presently MPs convicted of a serious offence - punishable by at least five years' imprisonment - can keep their pensions if they are not charged while in office.
Obeid - who was charged after he left Parliament in 2011 - faces being stripped of his lifetime annual pension worth more than $120,000 a year.
Fairfax Media understands Macdonald opted to convert a portion of his pension entitlement to a lump sum upon quitting politics in 2010.
Macdonald was entitled to an annual, indexed pension of $135,545 at the time, meaning he would have been able to claim up to $1.3 million as a lump sum.
The legislation means Macdonald faces being stripped of whatever ongoing annual payment he has been receiving plus a portion of the amount he took in a lump sum.
In March, Macdonald was found guilty of criminal misconduct over his decision to award a lucrative coal licence to a union mate, former Construction, Forestry, Mining and Energy Union boss John Maitland.
A jury found Macdonald guilty of two counts of wilful misconduct in public office. A sentencing hearing is set down for Friday.
