ISLAMABAD: The federal government has unveiled a comprehensive relief package for federal government employees, armed forces personnel, and pensioners as part of the Budget 2026-27, introducing salary increases, pension enhancements, and revisions to various allowances.
According to details contained in the Finance Bill, the government aims to provide financial relief to public-sector workers amid rising living costs while also restructuring parts of the existing pay system.
Ad-hoc Relief Allowances to Be Merged into Basic Pay
One of the key measures announced in the budget is the integration of previous ad-hoc relief allowances into employees’ basic salaries.
Under the new arrangement, the 15 percent ad-hoc relief allowance granted in 2022 and the 10 percent ad-hoc relief allowance announced in 2025 will be merged into the basic pay structure. This move is expected to increase the salary base on which future increments and benefits will be calculated.
Financial experts note that incorporating ad-hoc allowances into basic pay generally provides longer-term benefits to employees because future raises and retirement-related calculations are often linked to basic salary.
Seven Percent Ad-hoc Relief for Federal Employees
The Finance Bill further states that all federal government employees will receive a 7 percent ad-hoc relief allowance on their running basic pay.
This increase will apply across various federal departments and institutions and is expected to benefit employees from lower grades to senior administrative levels.
Government officials said the measure is intended to help employees cope with inflationary pressures and increasing household expenses.
Disparity Reduction Allowance Increased
Another important component of the relief package is the introduction of a 15 percent Disparity Reduction Allowance (DRA) 2026 based on basic pay.
The allowance will be available to employees from Basic Pay Scale (BPS) 1 to BPS-22, covering the entire federal workforce.
The disparity reduction mechanism has been used in recent years to address differences in compensation among employees serving in various departments and organizations.
Major Increase in Conveyance Allowance
The government has also announced a significant increase in the conveyance allowance.
According to the Finance Bill, the existing conveyance allowance will be increased by 50 percent, providing additional support to employees facing higher transportation costs due to fuel price fluctuations and urban commuting expenses.
The increase is expected to benefit a large number of government workers who rely on daily travel for official duties.
Special Relief for Civil Armed Forces Personnel
In a major development for personnel serving in civil armed forces, the Constant Attendant Allowance has been raised substantially.
The allowance has been increased from Rs7,000 to Rs30,000 per month, representing a more than fourfold increase.
Officials said the revision reflects the government’s recognition of the special requirements and responsibilities associated with service in security-related institutions.
Cabinet Division Employees to Receive Higher Special Pay
The budget also includes enhanced benefits for officers and staff working in the Cabinet Division.
Their monthly special pay has been increased from Rs6,000 to Rs20,000, significantly boosting their compensation package.
The move is aimed at improving remuneration for employees working in key administrative and policy-making institutions of the federal government.
Motorway Police Allowance Raised to 50 Percent
Employees of the National Highways and Motorway Police (NHMP) are also among the beneficiaries of the new relief package.
The special allowance for NHMP employees from BPS-1 to BPS-22 has been increased from 10 percent to 50 percent.
The government said the increase recognizes the demanding nature of motorway policing duties and the force’s role in maintaining road safety and law enforcement across the country.
Special Conveyance Allowance Enhanced
The Finance Bill further proposes an increase in the Special Conveyance Allowance, which has been raised from Rs6,000 to Rs10,000 per month.
The revised amount is expected to support employees who face additional transportation-related expenses due to the nature of their duties or physical requirements.
Seven Percent Increase in Pension
Pensioners have also been included in the relief package.
The government announced a 7 percent increase in baseline pension for all pensioners. The enhancement is intended to provide financial support to retired employees coping with inflation and rising living expenses.
The increase will apply to eligible pensioners receiving federal government pensions.
Effective Date
According to the Finance Bill, all the announced relief measures, including salary revisions, allowance increases, and pension enhancements, will come into effect from July 1, 2026, marking the start of the new fiscal year.
The government believes that the package will offer meaningful financial support to public-sector employees and pensioners while contributing to improved morale and economic stability for millions of beneficiaries across Pakistan.
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