When Joseph Muscat stepped down as prime minister, he received three substantial benefits that his predecessors were not entitled to, the results of a probe published on Wednesday indicate.

Those additional benefits – the use of a government-owned office in Sa Maison, a second official car and the option to receive a doubled lump sum by renouncing a three-year allowance – were introduced in 2018 and 2019.

Muscat’s cash lump sum, which topped €120,000, was especially substantial given that he would have arguably not qualified for the allowance he gave up to pocket it. 

That detail emerges from a report published by parliament’s commissioner for standards on Wednesday, which concluded that Prime Minister Robert Abela could not be held responsible for the terms of Muscat’s exit package, as the deal was made before Abela assumed office.

The commissioner also concluded that exit packages given to prime ministers and ministers should be codified in law, rather than be set by “cabinet decisions which nobody has access to.”

The commissioner’s office was asked to probe Muscat’s benefits package by both independent MEP candidate Arnold Cassola and Repubblika president Robert Aquilina in 2022.

Both Cassola and Aquilina argued that Muscat’s benefits package was not in the public interest and was excessively generous.

Muscat has in the past argued that the terms of his exit package were substantially similar to those of other former prime ministers and opposition leaders. He has also noted that the lump sum he received was taxed. 

Abela's office had initially refused Freedom of Information requests pertaining to Muscat's exit package, claiming "no specific agreement exists".

It was subsequently compelled to divulge aspects of it through a series of FOI requests and parliamentary questions. 

What did Muscat receive? 

Muscat stepped down as prime minister in January 2020 after almost seven years in the job. He also served as Opposition Leader for five years before that. Both those periods qualify when calculating exit benefits. 

When he resigned as prime minister, he was granted:

• A €120,128.40 ‘terminal benefit’ payment
• An official car and a chauffeur
• A second official car
• The use of an office in Sa Maison
• A personal assistant
• A diplomatic passport
• Two landline phone connections and an internet connection
• A PC with a printer and scanner
• A yearly €2,330 phone allowance
• A copy of the Government Gazette

The details of that package were agreed upon by Muscat’s own cabinet, in a meeting held on December 19, 2019. Muscat recused himself from those discussions, the commissioner noted.

How Muscat got a €120,000 lump sum

Most of the benefits Muscat received formed part of benefit packages which others before him, such as Prime Minister Lawrence Gonzi, also received. 

But three of those items did not. Previous recipients did not get a private office, second car or the option of doubling a lump sum by renouncing an allowance bound by terms the commissioner described as "fairly restrictive". 

Muscat pocketed the €120,000 lump sum by renouncing a transitional allowance afforded to prime ministers, ministers, junior ministers and Opposition leaders who exit office.

The allowance would have been equivalent to 65 per cent of his prime ministerial salary, for three years.

But crucially, the allowance is not paid in the first year if the recipient chooses to receive a terminal benefit payment, and recipients must also deduct allowance payments from their private income in the following two years.

Muscat immediately entered the consultancy sector upon resigning and declared just under €482,000 in income in 2020 alone.

Thanks to an amendment introduced during his time in office, he could double his terminal benefit payment by giving up the right to that allowance, which he would arguably not have received anyway due to his substantial personal income.

A 2011 NAO report noted the exceptions to a transitional allowance being paid.

As a result, the €60,064 terminal benefit he was originally entitled to doubled to €120,128. That, the standards commissioner acknowledged, was a “new and substantial” benefit that Muscat enjoyed when compared to his predecessors.

However, the Standards Commissioner said he was precluded from passing judgment on the financial terms of Muscat’s exit package, because the payment was made more than two years before a complaint about it was filed.

That meant that under the terms of the Standards for Public Life Act, the act was proscribed by law. According to that law, the commissioner can only investigate complaints made within one year of the act being alleged. 

The commissioner also noted, citing a decision made by his predecessor, that his office could not probe decisions made by the cabinet.

Benefit terms should be governed by law

He however flagged concerns about the way in which cabinet had awarded Muscat his exit package, and more specifically with the terms by which Muscat was given the right to use a state-owned office at Sa Maison.

The government has said that Muscat was granted use of that office on a “tolerance” basis.

According to a 2004 judgment, deals based on "tolerance" are not contractually binding.

But the terms of a benefit package imply such contractual ties, the commissioner said as he urged legislators to clarify this grey area.

“It’s not easy to reconcile the concession of an office in Sa Maison on a tolerance basis (which implies no ties for the government) with the inclusion of the office in the benefit package Dr Muscat is entitled to (which implies a tie),” the commissioner noted.

More broadly, the commissioner also advised legislators to pass laws which clearly stipulate the benefits that cabinet members are entitled to when they leave office.

That, he said, would ensure transparency, as opposed to allowing the cabinet to take such decisions.

By law, cabinet documents are not eligible for Freedom of Information requests.