In a move aimed at easing the financial burden on public servants, the President has approved the grant of a 10 percent Ad-hoc Relief Allowance for 2025 to all employees of the Federal Government. Effective from July 1, 2025, this allowance extends to Armed Forces personnel, members of the Civil Armed Forces, civilians employed under Defence Estimates, and contract employees serving on standard civil posts under Basic Pay Scales. The decision underscores the government’s commitment to supporting its workforce amid rising inflation and living costs, offering timely financial relief across the federal structure.
The relief allowance will be calculated as 10 percent of the running basic pay and will also factor in personal pay granted due to annual increments beyond the maximum of the existing pay scales. This ensures that even those employees who have reached the upper limits of their pay bands will benefit from the relief proportionally.
However, the grant comes with clearly defined parameters. The allowance will be subject to income tax and will be admissible during leave periods and the full duration of leave preparatory to retirement (LPR), excluding extraordinary leave. It will not, however, be treated as part of emoluments for purposes such as calculating pension or gratuity, nor will it impact deductions like house rent recovery. Furthermore, the allowance will not be provided to employees during foreign postings or deputations, although those returning from such assignments will receive the allowance as if they had remained in Pakistan during their tenure abroad.
Importantly, this allowance is to be managed within the current fiscal year’s approved budgetary limits. Ministries, divisions, and departments are instructed to accommodate this financial measure from within their allocated resources for 2025-26, as no supplementary grants will be issued. This stipulation reflects a fiscally disciplined approach by the government, aiming to provide relief without overextending national expenditures.
The issuance of this memorandum signifies another step in the government’s ongoing effort to maintain morale and economic stability among federal employees, ensuring their financial well-being within the constraints of responsible budgeting.
