The Toffees had a 10-point deduction reduced to six on appeal in February for the three-year period to 2021-22.

The latest appeal process must be concluded by 24 May, five days after the final Premier League game.

Sean Dyche’s side sit 16th in the table, two points above the drop zone.

The Blues travel to face Chelsea in the league on Monday (kick-off 20:00 BST) aiming to distance themselves from the relegation zone.

Profit and sustainability rules (PSR) permit clubs to lose £105m over three years and an independent commission found Everton breached that by £16.6m for the three-year period to 2022-23.

The Merseyside club could yet face a further points deduction in relation to interest costs associated with the building of the club’s new stadium at Bramley-Moore Dock, though that issue is unlikely to be resolved before the end of the season.

Timeline guide to Everton cases

24 March 2023: Premier League refers Everton to independent commission over alleged breach of financial fair play rules for the three-year accounting period ending with the 2021-22 season.

17 November 2023: Everton receive an immediate 10-point deduction after being found to have breached the Premier League’s financial rules.

15 January: Everton and Nottingham Forest are charged for breaches of the league’s profit and sustainability rules. The hearing has to be concluded within 12 weeks of this date, which is 8 April.

26 February: Everton’s first penalty for breaching Premier League financial rules is reduced from 10 points to six after an appeal.

25 March: Hearing for Everton’s second charge, relating to three-year accounting period ending in 2022-23, takes place this week.

8 April: Everton receive second points deduction of two points.

15 April: Everton lodge formal appeal over second points deduction.

19 May: The final day of the Premier League season, when Everton visit Arsenal (16:00 BST).

24 May: The latest possible date for an appeal hearing to be concluded.

Everton were docked two points for a second violation of the Premier League’s profit and sustainability rules (PSR) on Monday.

They say they will appeal against the decision but the process may not be completed before the season ends.

That could leave clubs uncertain of their top-flight status after 19 May.

PSR rules permit clubs to lose £105m over three years and Everton were found to have breached that by £16.6m for the three-year period to 2022-23.

The points deduction has dropped Everton one place to 16th in the Premier League, two points above the relegation zone.

The Toffees also had a 10-point deduction reduced to six on appeal in February for the three-year period to 2021-22 while Nottingham Forest were deducted four points for PSR breaches in March and are awaiting the outcome of an appeal.

Luton sit just inside the drop zone – separated from 17th-placed Forest on goal difference – and Townsend says his club still look at the league as though no points have been deducted because of the uncertainty surrounding hearings and appeals processes.

“We don’t know what’s going to happen with appeals,” the former Everton player told BBC Radio 5 Live’s Monday Night Club.

“We were probably celebrating when Everton got 10 points taken off them and then they got four given back and we’re back in the relegation zone. So we take out the deductions to take away the confusion and we’ll see at the end of the season.”

Townsend said that he does not advocate for teams receiving points deductions and that the way in which they are handed out “doesn’t make sense”.

He added: “I think it makes a mockery of the Premier League. When you announce the charge, you have to be certain of the points deduction.”

The 2023-24 season technically remains ‘live’ until the annual general meeting in June when relegated clubs transfer their certificates and 24 May has been selected as a ‘backstop date’ for the appeals process to be concluded.

Townsend said he thinks clubs had not anticipated that punishments for breaching the rules would be “this severe”.

“Everton would have known they weren’t going to be inside that £105m debt mark because they spent £30m in the summer,” he said.

“They spent that knowing they weren’t going to make this £105m target. I think clubs just thought it would be a fine and a slap on the wrists and get on with it.”

The Premier League had asked for a five-point deduction for Everton but an independent commission concluded that the fact Everton have already been punished this season “for losses in years which overlap with the years at issue in these proceedings” merited a two-point reduction in punishment.

A further point was credited back for the loss of revenue after a sponsorship deal with Russian company USM was suspended, along with the early admission of guilt.

‘We know what we need to do to stay in Premier League’

Despite the uncertainty around when the appeal process might be complete, Everton fan and host of The Blue Room podcast Peter MacFarlane believes this latest deduction gives them – if not their relegation rivals – clarity.

“There has to be some sort of relief because it appears that it’s coming to its conclusion now,” he told BBC Radio 5 Live.

“I feel like we’ve been in the dark since November – we haven’t actually known where we stood in the league with these point deductions.

“As disappointing as it is to get more points taken off us and how much of an injustice we may feel that is, at least we now know what we need to do to stay in the Premier League.”

Everton face games against relegation rivals Nottingham Forest, Sheffield United and Luton as well as the Merseyside derby on 24 April and a trip to Arsenal on the last day of the season.

“It’s been difficult to keep morale high – or any resemblance of morale, to be honest. We just have to go out and win now and stay in the Premier League,” MacFarlane said.

“It’s been difficult to pick up points at home given the mood around the place but Evertonians have to come together, and I know that’s what we do best when our backs are up against the wall.”

An independent commission found Forest’s losses to 2022-23 breached the threshold of £61m by £34.5m.

The loss of points has placed Forest into the relegation zone in 18th place, one point behind Luton Town.

Forest said in a statement they would not be making any further comment.

They are the second top-flight team to be penalised for PSR breaches after Everton lost 10 points in November, which was reduced to six on appeal.

Last week, Forest said they were “extremely disappointed” with the decision, which they said “raises issues of concern for all aspirant clubs”.

Premier League clubs can lose £105m over three seasons – £35m per campaign – but Forest’s maximum loss was only permitted to be £61m because they spent two years of the assessment period in the Championship.

Forest were set to be hit with a six-point deduction – three points for the initial breach and a further three for the size of the breach – but their “early plea” and “cooperation” meant that was reduced to four points.

The league’s rules state any appeals process should “conclude no later than and if possible some time before 24 May” – five days after the season finishes.

Forest, who were charged in January, won promotion from the second tier in 2022 and proceeded to sign a British-record 22 new players that summer, also bringing in five players on loan.

Their net transfer spend over the 2022-23 season was £142.8m.

They lost an average of £3m across 2020 and 2021 with a further £40m loss in 2022 and £52m in 2023, amounting to a total of £95m.