Taxpayers could have to fork out €40 million in arrears and another €6 million a year if the European Court of Justice ruled service pension cuts illegal, the Finance Minister said.

Edward Scicluna was reacting to the legal opinion given by the EU’s Attorney General, Yves Bot, who concluded that the deduction of part of the pensions received by former employees of the British government was in breach of EU rules. The measure, in force since 1979, was implemented by successive governments till this day.

The European Court is expected to make its decision early next year. Sources have told this newspaper it was quite rare for the Court to overturn the Attorney General’s opinion.

Prof. Scicluna pointed out that, since 1997, service pension cuts were being reduced. “We will have to wait for the court’s ruling but if the Attorney General’s decision is confirmed a lot would depend on the parameters of the judgment,” noted.

“If we had to implement the decision right away it would cost about €6 million a year and go down thereafter as those directly affected would start passing away. However, if compensation were to be backdated to 2004 [when Malta joined the EU], there could be an additional bill of up to €40 million because this could also include settlements to former British service employees who died in due course,” Prof. Scicluna said.