A new law passed by Iraqi MPs to raise retirement benefits for civil servants is drawing criticism amid accusations politicians will use a loophole to secure lavish benefits for themselves.

The issue of retirement benefits for top bureaucrats and politicians, which is drawing attention ahead of parliamentary elections, sparked protests last year to decry lucrative pensions for the political elite while many people still grapple with daily shortages of basic services and poor security.

The Unified Retirement Law, adopted on Monday, has been hailed by some for raising minimum public sector pensions for retired civil servants, and is a rare piece of significant legislation passed by Iraq's chronically deadlocked parliament.

Bureaucrats who retire after age 50 and who have spent more than 15 years in government service will receive at least 400,000 Iraqi dinars ($333/245 euros) a month, up from the previous minimum of 250,000 dinars.

But an article towards the end of the law exempts a vast swathe of top-level politicians and civil servants from the pay scale, and sets percentage limits that one lawmaker said could be abused.

"The law specifies standards that should apply to everyone, but excluded senior Iraqi state officials, including MPs, ministers and their deputies," Ammar Toma, an MP from Basra with the small Shiite party Fadhila, told AFP.

"This privilege takes us back to the same problem that gathered the street against us -- they demanded that we reduce the gap between normal people and officials. Leaving the gap this wide will lead to social problems, and will also lead to disorder, and make citizens lose trust in politicians."

Toma said that while Article 37 sets minimum pensions at 25 percent of the final salary of those excluded, various allowances and exceptions would easily allow them to climb close to the 80 percent maximum set out in the law.

"Everybody will get a minimum of 70 percent of their final salary thanks to a loophole in the new law," Toma said, referring to those exempted from the general pay scale.

MPs are currently paid 13 million dinars ($10,800) per month, according to Toma, and receive additional allowances for bodyguards whether or not they hire the maximum amount.

Other benefits also

They also receive other benefits ranging from diplomatic passports to allotments of land.

Ministers are paid comparable salaries, while senior civil servants and special advisers receive around 8 million dinars ($6,700).

Their retirement benefits previously amounted to a guaranteed 80 percent of their final salary, along with additional allowances for security. That sparked protests in September, when people took to the streets of most of Iraq's 18 provinces to criticise the pensions.

The new law had been targeted at paring back those benefits, but critics such as Toma say lawmakers have simply made up the difference by adding other allowances.

Another MP has said the law is unconstitutional because it discriminates against certain Iraqis by exempting a privileged few from the pension scale.

"The legal article... excludes MPs and other special grades," Samira al-Mussawi, from Prime Minister Nuri al-Maliki's political coalition, said in a statement.

"Article 14 of the constitution confirms unequivocally that all Iraqis are equal... and thus voting on the article (exempting MPs) is a clear violation of the constitution."

The controversy comes ahead of parliamentary elections slated for April 30. While issues such as poor basic services, rampant corruption and high unemployment are likely to remain at the fore, benefits provided to MPs have struck a chord with voters.

"The reason MPs approved this pension law is because this parliamentary term is going to end soon, and they want to guarantee millions for them and their families for dozens of years," an activist who identified himself as Abu Ghazi al-Madhlum wrote on Facebook.

"We reject this pension that costs the state billions of dinars every year," he said.

"We will use all peaceful means possible that are guaranteed in the constitution to express our rejection."