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Brexit row over cost of ‘lavish’ pensions paid to British MEPs

nigel farage
Nigel Farage is amongst the scheme's almost 900 members - Patrick Seeger/EPA/Shutterstock

EU taxpayers “should not be on the hook” for “lavish” pensions paid to British former MEPs, a German politician has said.

A supplementary pension scheme for MEPs, which pays out up to €7,000 (£6,000) monthly on top of their lucrative final salary payments, has a deficit of more than €310m and could become bankrupt as early as 2025.

An oral amendment in the Budgetary Control Committee earlier this week demanded that every legal option to avoid further taxpayer bailouts of the struggling supplementary pension fund is explored.

Author of the amendment, Daniel Freund, a German Green MEP, said: “For the British members in particular, I don’t think that EU taxpayers should bail out the lavish additional pensions.

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“All the UK MEPs have UK pensions, from their time in the parliament, and that now EU taxpayers should be on the hook when the UK has obviously left the union, that really should happen even less.”

The motion will still need to be approved by the wider parliament.

It comes after hundreds of former MEPs went to the courts in an effort to reverse rule changes introduced by the parliament last year, which effectively halved their payments.

The lucrative scheme saw EU taxpayers effectively triple MEPs’ contributions between 1990 and 2009, when it was closed to new members.

The scheme counts Marine Le Pen and Nigel Farage amongst its almost 900 members. Around 20 current MEPs are beneficiaries, and the average size of the pot that the supplementary pension scheme provides is €375,000.

marine le pen
Right-wing French politician Marine Le Pen is also a beneficiary of the scheme - THOMAS SAMSON/AFP

Payments from the voluntary scheme are received on top of the lucrative final salary pension that MEPs get when they turn 63. They receive 3.5pc of their salary for each year they are in office up to 70pc of their total pay packet.

In comparison, members of Parliament in the UK now receive less than 2pc of their pensionable earnings for each year they work, in a “Career Average Revalued Earning” scheme.

Hundreds of current and former MEPs have demanded the full restoration of their benefits and for the European Parliament to cough up the difference between what it has been paying and what the former MEPs were previously receiving.

More than 400 individual cases have been launched at the European Court of Justice.

The legal cases have been brought individually because the court does not allow for class actions, but all but one of the pension scheme members have been granted anonymity.

Lawyers for Spanish representative Enrique Baron Crespo argue that the scheme’s rules in respect to entitlements and rights can only be changed in regards to new benefits.

They also argue that the cut is disproportionate and breaches the “principle of parliamentary independence”.

Legal challenges over changes to the scheme’s rules were defeated in 2014 and 2022, but former members are hopeful they can restore their benefits to former levels. This is believed to be the first time that those already drawing pensions have sued.

New contributions to the scheme were stopped by the EU parliament when it closed the scheme 14 years ago.

One former British MEP said that his monthly payments from the scheme had been slashed from just over €3,600 to €1,800.

Andrew Duff, who represented the Liberal Democrats in Brussels for 15 years, told the Financial Times: “Of course I am not destitute, but it is income I was promised.”

A spokesman for the European Parliament said that they had “taken note” of the cases against what they described as putting the voluntary fund on a “more sustainable path”.