Joseph Muscat’s €120,000 golden handshake was THREE times average terminal benefits

The €120,000 golden handshake paid by taxpayers to disgraced former prime minister Joseph Muscat was three times the average terminal benefit paid to other former Cabinet members and raises serious questions about the lack of transparency behind the payment.

According to the information obtained by The Shift, since the introduction of the terminal benefits and transitional allowance scheme in 2008, 38 former politicians have been paid a total of €1.4 million in payments on ending their political career, or an average of €37,000 each.

And despite Muscat having spent less time in politics than his predecessors, both former PN prime minister Lawrence Gonzi and former PL prime minister Alfred Sant were awarded much smaller payouts than Muscat’s.

In direct contravention of the principles of accountability and transparency, Prime Minister Robert Abela has consistently refused to explain how Muscat’s €120,000 payment out of public funds was calculated.

The Shift obtained information on the amount each MP was paid as a result of a Freedom of Information request.

Muscat’s secret pay-out

Following revelations by The Shift that Joseph Muscat was awarded a payout of €120,000, when according to a scheme introduced in 2008, he was only entitled to half that payment, new information obtained by this newsroom shows an even bigger discrepancy that raises serious questions about how the terminal benefits scheme is being managed.

According to the 2008 arrangement, Cabinet members, including prime ministers, were entitled to a terminal benefit “equivalent to one-twelfth of the annual salary and allowances received at the time of termination of their employment for every year of continuous service with the Government of Malta.”

Former prime minister Gonzi was paid a terminal benefit of €72,901 upon his exit from politics, even though he spent almost four years more than Muscat at the helm of Castille.

Alfred Sant was paid €36,914 in 2008 when he left local politics. Sant spent less than two years at Castille but served as leader of the opposition for longer than Muscat did.

This information confirms that Muscat was treated more generously than his predecessors and that his payout was calculated on an undisclosed measurement that significantly boosted the amount he received.

The sums paid in terminal benefits to other former Cabinet members, including those in Muscat’s own Cabinet, also show notable discrepancies, making Muscat’s payment even more questionable.

The Shift has revealed that in 2018 and 2019, Muscat introduced as yet undisclosed amendments to the 2008 benefits scheme, prompting suggestions this may have been done to prepare for his own exit.

Both Muscat and his successor Robert Abela have failed to explain these changes, that were introduced via a secret Cabinet memo.

Terminal benefits unique to politicians

The only public servants entitled to receive terminal benefits are politicians. No other public servant receives any sort of benefit when they retire, apart from the normal pension entitlement.

Over and above these lucrative one-time payments, former ministers and members of parliament also receive a special pension when they reach pensionable age, over and above the usual contributory pension.

Through this privileged pension, former Cabinet members receive the full two-thirds of the final salary of the position they used to occupy, uncapped, until their death. Upon their demise, this full pension right is inherited by the spouse.

On average, this privileged pension amounts to some €30,000 a year over and above the social security pension received by all other Maltese citizens.

The maximum pension a Maltese citizen can get, independently of his/her declared income, is no more than €12,500 a year.

Some sitting ministers in Robert Abela’s government, including Foreign Affairs Minister Evarist Bartolo and Active Ageing Minister Michael Farrugia, who are both over 65, already receive their full privileged ministerial pension on top of their full ministerial salary.