Updated | Muscat says he was paid €78,000 after tax, renounced transitional allowance

Former Prime Minister says he renounced transitional allowance and paid €41,000 in tax, in social media post on details of all former leaders' termination benefits

Joseph Muscat
Joseph Muscat

Former Prime Minister Joseph Muscat's termination package saw him receive €120,000, the equivalent of two years of the prime minister’s salary.

According to The Shift News, Muscat walked away from his position with a one-time payment amounting to €120,128.40, apart from his regular parliamentary honoraria which he continued receiving up until October 2020, when he resigned from Parliament.

But Muscat has retorted that The Shift had left out details provided to them by the Office of the Prime Minister, showing he was paid €78,000 after paying €41,633 in directly deductible tax.

Muscat published the sums paid out to former country leaders and ministers in terminal benefits and allowances, in a riposte on social media to reports of his €120,000 allowance.

He said he had requested the details of the answers provided by the OPM to The Shift, which had not been published.

Specifically, Muscat pointed out that he was paid a one-time sum of €120,128 less €41,633 in tax, of which he was ultimately paid €78,495. “I renounced a transitional allowance payable for the time spent as Prime Minister and leader of the Opposition from 2008 to 2020.”

He then said that his predecessor, prime minister Lawrence Gonzi, was paid a sum of €72,901 and a transitional allowance of €8,737, for a total of €81,638.

The former Opposition leader, Simon Busuttil, was paid €23,371 for serving four years as Opposition leader.

He also said former prime minister Eddie Fenech Adami’s former head of secretariat, Richard Cachia Caruana, was paid €179,931 tax-free despite not being an elected official but a person of trust. “He was also paid €36,453 as ‘notice’ after being voted down in a no-confidence motion in parliament, and €39,549 for vacation leave he never claimed, for a total of €255,933.”

Muscat said he was treated no differently from Gonzi or Busuttil when he was still paid his MP’s honorarium after stepping down as Prime Minister and serving as a backbencher. “There’s nothing secret in all this, having also submitted my declaration of assets as an MP.”

The payment to Muscat is part of the Terminal and Transitional Benefit scheme, introduced by the Nationalist government in 2004. All Prime Ministers, Ministers, Parliamentary Secretaries and Opposition Leaders are entitled to this benefit upon termination of their employment.

The calculations of this benefit were presented in a 2008 document after being tabled in Parliament by Prime Minister Lawrence Gonzi, but it is unknown whether the schedule has been updated since then. Prime Ministers are entitled to a terminal benefit that is equivalent to a month’s salary for every year of continuous service in the post. However, a minimum benefit is in place equivalent to six months’ salary.

In fact, the prime minister’s annual salary stands at €56,880 with additional allowances and a €441 cash payment, according to 2019 figures.

The Transitional Allowance is a monthly salary payable for three years after the termination of employment. Since Muscat spent just under seven years as Prime Minister, his Transitional Allowance would have granted him 55% of the salary and benefits he had when he resigned, or €104,187 across three years.