Publishing its consultation on how MPs' pay should be updated, IPSA said: "We have a statutory duty under the Parliamentary Standards Act 2009 to review MPs' pay in the first year of each parliament.
"We decided after consulting in 2012, 2013 and 2015 that the best way to update MPs' pay periodically was to link it to a transparent, external benchmark, and that the most appropriate benchmark was a measure of earnings.
"This consultation proposes to retain that approach, using the Office of National Statistics (ONS) Average Weekly Earnings figure reflecting changes in public sector earnings for the period ahead."
Richard Lloyd, IPSA's Interim Chair, said: "IPSA is responsible for setting MP's pay and pensions. We act independently of parliament and have a statutory duty to review MPs' pay in the first year of each parliament.
"We carried out a major review of MPs' pay with consultations in 2012, 2013 and 2015, and technical adjustments in 2018. Given the huge economic uncertainties arising from the coronavirus pandemic, we do not think it is right to depart from this approach now."
Pictures of the week: October 4- 10
Pictures of the week: October 4- 10
People walk past a sign that refers to COVID-19 closures in London, Friday, Oct. 9, 2020. The British economy grew by far less than anticipated during August, raising concerns that the recovery from the coronavirus recession was already stuttering even before the reimposition of an array of lockdown restrictions. (AP Photo/Frank Augstein)
England's Danny Ings, laying on the pitch, scores his team's third goal, during the international friendly soccer match between England and Wales at Wembley stadium in London, Thursday Oct. 8, 2020. England won the match 3-0.(Glynn Kirk/Pool via AP)
Scotland's Kenny McLean, right, celebrates with Scotland goalkeeper David Marshall after scoring from a penalty shot during the Euro 2020 playoff semifinal soccer match between Scotland and Israel, at the Hampden stadium in Glasgow, Scotland, Thursday, Oct. 8, 2020. (AP Photo/Scott Heppell)
A man cycles past the Kalliopi Lemos �Bag of Aspirations� Mild steel and stainless steel, a giant handbag sculpture on display on the corner of New Bond Street and Brook Street in London. (Photo by Dave Rushen / SOPA Images/Sipa USA)
LONDON, ENGLAND - OCTOBER 07: Performers on the Ellis Island stage during the "Lockdown Town" Launch Night at One Night Records on October 07, 2020 in London, England. "Lockdown Town" is London's first socially-distanced immersive live music event and venue. (Photo by Tristan Fewings/Getty Images)
VIRGINIA WATER, ENGLAND - OCTOBER 08: Patrick Reed of The United States of America prepares to play his second shot on the 9th hole during Day One of the BMW PGA Championship at Wentworth Golf Club on October 08, 2020 in Virginia Water, England. (Photo by Andrew Redington/Getty Images)
EDITORIAL USE ONLY Claire Whitaker OBE, Southampton UK City of Culture Bid Director (2nd right) and Councillor Satvir Kaur (3rd right) are joined by musicians Tyrone (left) and Warbz (right), dancer and artistic director Zoie Golding (2nd left) and chef Shelina Permalloo (3rd left) launch Southampton's bid to become the UK City of Culture 2025, outside Southampton's Bargate.
The London Eye on the south bank of the river Thames, as the sun rises, in London, Wednesday, Oct. 7, 2020. (AP Photo/Alberto Pezzali)
A woman wears a face mask as she sits on a bus, in London, Wednesday, Oct. 7, 2020. Like other countries in Europe, the U.K. has seen rising coronavirus infections over the past few weeks, which has prompted the government to announce a series of restrictions, both nationally and locally, to keep a lid on infections. (AP Photo/Alberto Pezzali)
Tottenham Hotspur's Ria Percival, left, and London's Harley Bennett challenge for the ball during the women's Continental League Cup match between Tottenham Hotspur and London City Lionesses in London, Wednesday, Oct. 7, 2020. (AP Photo/Frank Augstein)
A primates head part of Patrick Goddard�s Humans-Animals-Monsters sculpture during the Frieze Sculpture 2020 exhibition at Regent's Park. (Photo by Dave Rushen / SOPA Images/Sipa USA)
BLACKPOOL, ENGLAND - OCTOBER 06: People wearing face masks play games in an amusement arcade on October 06, 2020 in Blackpool, England. This year to help boost the tourism trade, which has been hit by the Covid-19 pandemic, Blackpool Illuminations will remain on display until January, two months longer than normal. (Photo by Christopher Furlong/Getty Images)
NORTHWICH, UNITED KINGDOM - OCTOBER 06: A mannequin wearing a face mask and nurse's uniform stands next to a sign supporting the NHS, stands in a field during the Covid-19 pandemic on October 06, 2020 in Northwich, United Kingdom. (Photo by Christopher Furlong/Getty Images)
A woman in protective face mask is seen shopping by a stall at Lewisham street market as the second wave of Coronavirus hits London, England on October 6, 2020. (Photo by Dominika Zarzycka/NurPhoto via Getty Images)
Boscombe pier is silhouetted as dawn breaks over Boscombe beach in Dorset. (Photo by Andrew Matthews/PA Images via Getty Images)
Australian street artist James Cochran, also known as Jimmy C, poses for a portrait as he finishes working for the day, with just a coat of varnish left to finish applying on his London cityscape mural on a Network Rail wall by Blackfriars Station, in London, Monday, Oct. 5, 2020. It is the first time Cochran has painted a cityscape as a piece of street art outside of his studio and has taken six days to paint working through wet and rainy conditions. (AP Photo/Matt Dunham)
Two swimmers run into the sea as the sun rises over Boscombe beach in Dorset. (Photo by Andrew Matthews/PA Images via Getty Images)
Daniel Marc Hooper, better known as environmental activist Swampy, assists fellow anti-HS2 tree protectors from a makeshift tree house about sixty feet above ground at a wildlife protection camp in ancient woodland at Jones Hill Wood on 5 October 2020 in Aylesbury Vale, United Kingdom. The Jones Hill Wood camp, one of several protest camps set up by anti-HS2 activists along the route of the £106bn HS2 high-speed rail link in order to resist the controversial infrastructure project, is currently being evicted by National Eviction Team bailiffs working on behalf of HS2 Ltd. (photo by Mark Kerrison/In Pictures via Getty Images)
A surfer makes their way into the sea as the sun starts to rise over Boscombe beach in Dorset. (Photo by Andrew Matthews/PA Images via Getty Images)
Actress Jennifer Saunders, front center, and five colleagues carry out a 'silent stand' outside the Gielgud Theatre, London, Monday Oct. 5, 2020, on behalf of the UK theatre industry. The two minute stand is to show solidarity with those in the UK theatre industry who have lost their jobs and received no government support, to highlight the lack of government guidance for the reopening of theatres, an to ask the government to provide the industry with a date when theatres can reopen without social distancing. (AP Photo/Alastair Grant)
Japan's Hiroki Nishida in action during the Elite Wheelchair Race during the Virgin Money London Marathon around St James' Park. (Photo by Ian Walton/PA Images via Getty Images)
GALLOWAY, NEW JERSEY - OCTOBER 04: Mel Reid of England (C) is doused with champagne after winning the ShopRite LPGA Classic presented by Acer on the Bay Course at Seaview Hotel and Golf Club on October 04, 2020 in Galloway, New Jersey. (Photo by Michael Cohen/Getty Images)
Runners pass cardboard cutouts of Britain's Queen Elizabeth II and Prince William during the London Marathon in London, England, Sunday, Oct. 4, 2020. Athletes are competing on a 26.2-mile (42.2-kilometer) closed-loop course consisting of 19.6 clockwise laps around St. James' Park. The traditional course along the River Thames was scrapped because of the coronavirus pandemic and only elite men and women are competing and no spectators are permitted. (John Sibley/Pool via AP)
A resident in Rothbury in Northumberland bails water from their vehicle after the River Coquet burst its banks. The UK's wet weekend will continue as a weather warning for rain across parts of Wales and England has been extended.
Kenya's Brigid Kosgei, left, and Kenya's Ruth Chepngetich race along Horseguards Parade during the London Marathon in London, England, Sunday, Oct. 4, 2020. Athletes are competing on a 26.2-mile (42.2-kilometer) closed-loop course consisting of 19.6 clockwise laps around St. James' Park. The traditional course along the River Thames was scrapped because of the coronavirus pandemic and only elite men and women are competing and no spectators are permitted. (Adam Davy/Pool via AP)
A van is stuck in flood water after the Padbury brook burst its banks near Buckingham, England, Monday Oct. 5, 2020. Heavy rain over the weekend has brought flooding and travel disruption to parts of Britain. (Steve Parsons/PA via AP)
Cars make their way through a flooded road in Claudy, County Londonderry. The UK's wet weekend will continue as a weather warning for rain across parts of Wales and England has been extended.
Manchester United's manager Ole Gunnar Solskjaer reacts after Tottenham scored their sixth goal during the English Premier League soccer match between Manchester United and Tottenham Hotspur at Old Trafford in Manchester, England, Sunday, Oct. 4, 2020. (Oli Scarff/Pool via AP)
BIRMINGHAM, ENGLAND - OCTOBER 04: Ben Duckett and Dan Christian of Notts Outlaws celebrate victory in the Vitality Blast 20 Final between Surrey and Notts Outlaws at Edgbaston on October 04, 2020 in Birmingham, England. (Photo by Alex Davidson/Getty Images)
Mark Smith 25228 seen running past Downing Street, London taking part in the Virgin Money Virtual London Marathon running for the St Lukes Hospice. (Photo by Dave Rushen / SOPA Images/Sipa USA)
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The consultation will close on 6 November 2020 and IPSA is expected to make a decision in December 2020.
Answering questions on whether a pay rise for MPs is appropriate given the current climate, business minister Zadhim Zahawi told Sky News that using IPSA was better than the previous system where MPs decided their own pay.
He said: "It's independent, but I think it's incumbent on the leadership of IPSA to also explain to the public – because we all exist in the same social fabric of society and the court of public opinion is important – as to why they think this is the right thing to do."
Asked if he would return the money or consider giving it to a food bank, he said he would potentially look at donating it to one of his "very good causes", including the Shakespeare Hospice in his Stratford-upon-Avon constituency.