The federal government on Tuesday issued notifications for a 10% increase in net pensions for retired civilian and armed forces pensioners and a grant of 10% ad-hoc allowance to civilian and armed forces employees.
The ministry of finance issued three separate notifications to give effect to the increase in salaries of civilian and armed forces employees, increase in pensions and also to notify that minimum pensions should be Rs5,000 a month.
The Pakistan Muslim League-Nawaz government had announced the increases in the budget for fiscal year 2013-14 and the decision will take effect from July 1 of the current fiscal.
The increase will be on basic pay and net pensions as the government has excluded all other allowances for the purpose of calculating the amount. The increase will not be merged in the basic pay and treated as an allowance, according to the notification.
On the eve of the budget, the PML-N government had decided to freeze the salaries of civilian and armed forces employees. But later, Finance Minister Ishaq Dar retreated from his earlier position that a salary raise was not viable due to the precarious fiscal situation and announced an increase in the salary of government employees as an ad-hoc allowance.
The employees are already receiving three ad-hoc relief allowances of 20% for 2012, 15% for 2011 and 50% for 2010. Merging them with the basic pay will augment the pays and increase the house rent that is being worked out at 45% of the basic pay, thus the government does not add the allowances to control the housing cost of the employees.
The 10% increase will be subject to income tax and will not be treated as part of emoluments for the purpose of calculation of pension, gratuity and recovery of house rent, the notification added.
According to the notification, the 10% increase in salaries will be in the shape of ad-hoc relief allowance and will be admissible till further orders. The increase will also be applicable on civilian employees paid from the defence budget, including contingent paid staff.
The finance ministry said the respective ministries and divisions will meet the expenditures on additional pays from within the budgetary allocations as no supplementary grants would be given on these accounts. The move is aimed at controlling the expenditures in a bid to remain within the overall budgetary limits at a time when the country’s financial performance is being monitored by the International Monetary Fund.
President Asif Ali Zardari had sanctioned a 10% increase in net pensions of all civil employees of the government, including civilians paid from the defence budget. The increase is also applicable to retired armed forces and civilian personnel that are paid from the civilian budget.
Further, the PML-N government has also allowed the 50% increase in pensions of new pensioners which were earlier allowed to only old pensioners.
Published in The Express Tribune, July 17th, 2013.