Federal employees to get 85% hike in house rent ceiling

The federal government has approved an 85 percent increase in the house rent ceiling for federal employees. Following cabinet approval, a notification has been issued raising the house rent ceiling for government employees.

The cabinet had approved an increase of up to 85 percent, following a summary submitted by the Ministry of Housing and Works.

The proposal applies uniformly to federal employees from Grade 1 to Grade 22. The federal cabinet approved the summary through circulation.

The revised allowance applies to all federal employees in Islamabad, Rawalpindi, Lahore, Karachi, Peshawar, and Quetta. The initiative is likely to cost the national exchequer around Rs.12 billion.

Sources said that the Ministry of Housing and Works had proposed to the federal cabinet that the rent allowance of the federal employees should be substantially increased due to rising inflation and an increase in rents.

The ministry said that the rents in urban areas have increased significantly, and it has become difficult for government employees to get suitable accommodation within the existing allowance. The rental ceiling was last modified on September 28, 2021.

Pakistan launches new pension scheme for government employees

The federal government has introduced a new pension scheme for both federal employees and the armed forces as the system already in place burdened the national exchequer.

The government has now made the scheme contributory to share the amount with an employee and the government.

Whereas the ministry of finance has issued notification of the new scheme.

The new scheme mandates a total contribution of 22% to the pension fund while employees will contribute 10 percent and remaining 12 percent by the government.

The government has allocated a sum of Rs10 billion for the new pension fund.

The new pension system will not apply to current government employees but will come into effect for employees recruited after July 1, 2024. For military personnel, the new pension scheme is expected to be enforced from July 1, 2025.