Govt workers, pensioners to get special allowance

The government has announced a special allowance for public sector employees and pensioners, effective from July 1, in a move aimed at cushioning their incomes.

According to a finance ministry circular issued yesterday, employees in Grades 1 to 9 will receive an additional 10 percent of their basic salary each year, while those in Grades 10 to 20 will receive an additional 15 percent. The minimum payable amount will be Tk 1,000 for employees and Tk 500 for pensioners.

The allowance will also be extended to those on post-retirement leave, suspended employees (at 50 percent of their last basic), and certain contractual appointees.

Finance ministry officials estimate that implementing the allowance will require Tk 5,000–5,500 crore.

In July 2023, the previous government had announced an additional five percent special incentive, on top of the existing annual five percent increment, for government employees.

Yesterday's circular cancels that order, meaning the actual annual increases now stand at five percent and 10 percent, respectively, for different grades.

In the proposed FY26 budget, the government allocated Tk 84,114 crore for salaries and allowances of public employees -- up from Tk 79,247 crore in the previous fiscal year.

The new allowance will not apply to employees on unpaid leave or those who surrendered their entire pension without restoration.

For self-governing and state-owned institutions outside the revenue budget, the allowance must be financed from their own funds, the circular added.

Foreign ministry officials further said the allowance will not be applicable to members of the judiciary or the armed forces.