The government on Wednesday notified 15 per cent increase in pensions and 20-25pc increase in salaries of the public servants with effect from July 1.

In a series of notifications issued by the Ministry of Finance, the government also restricted public servants from drawing more than Rs1 million per annum on account of their membership on the boards of directors of various corporate entities.

These employees would be entitled to retain a maximum of Rs1m per year, deposit any access amount in the government treasury, and submit their report to the MoF.

Under one of the notifications, the government allowed Ad hoc Relief Allowance-2024 (ARA) at the rate of 25pc of running basic pay for basic pay scale (BPS) 1 to 16 and 20pc for BPS 17 to 22 for all the federal government employees including armed forces personnel, civil armed forces and civil employees as well as the civilians paid from Defence Estimates.

They also include contingent paid staff and contract staff employed against civil posts in basic pay scales on standard terms and conditions of contract appointment.

The amount of ARA will be subject to income tax and also admissible during leave and the entire period of leave prior to retirement except during extraordinary leave.

The ARA will not be treated as part of emoluments for the purpose of calculation of pension or gratuity and recovery of house rent and will also not be admissible to the employees during the tenure of their posting or deputation abroad.

However, the ARA will be admissible to the employees posted abroad on their repatriation from foreign posting at the rate and amount which would have been admissible to them had they not been posted abroad.

The term “basic pay” for the purpose of ARA-2024 would also include the amount of personal pay granted on account of annual increments beyond the maximum of the existing pay scales.

In another memorandum, the MoF also notified an increase of 15pc of net pension to all civil pensioners of the federal government, including civilians paid from defence estimates and retired personnel of the armed forces and civil armed forces. The same rate of increase would also apply to pensioners retiring on or after July 1.

“Net pension” has been defined as “pension being drawn minus medical allowance” for the purpose of increase. The increase will also be applicable to family pensions under pension-cum-gratuity scheme of 1954 and Liberalised Pension Rules 1977 on pensions sanctioned under the Central Civil Services (Extraordinary Pension) Rules as well as on Compassionate Allowance.

However, this increase in pension is not admissible on Special Additional Pension allowed in lieu of pre-retirement Orderly Allowance and monetised value of a driver or any orderly.

The notification clarified that if the gross pension sanctioned by the federal government is shared with any government under accounts code Volume-1, the amount of increase in pension will be apportioned between the federal government and the other government concerned on a proportionate basis.

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