ISLAMABAD: On Wednesday, the federal government announced a 15.6% raise in the minimum pay for its workers and prohibited post-1959 pensioners who are living overseas from receiving their benefits in foreign currency.
The Ministry of Finance said in a notification that, as of July 1, 2024, the minimum salary and gross pay of federal government civil servants as well as civilians paid from defense estimates would increase from Rs32,000 to Rs37,000 per month.
The notification stated that this rise would also apply to contract employees and contingent paid staff against civil jobs in Basic Pay Scales on standard terms and conditions of contract employment. “The difference as a special allowance shall be granted to those whose gross salary is less than Rs 37,000,” it stated.
With the exception of extraordinary leave, the special allowance amount will be admissible during leave and the whole leave period before to retirement (LPR) and will be subject to income tax.
Stops pensions in foreign currency for retirees who retired after 1959
During the duration of their posting or deputation overseas, personnel will not be eligible to receive the special allowance amount, nor will it be considered part of their emoluments for the purposes of calculating pensions, gratuities, and recovering housing rent.
Nonetheless, upon their return from posting or deputation overseas, the personnel would be eligible for this at the same rate and amount as they would have been if they hadn’t been posted overseas.
“No additional grants would be given on this account and the aforementioned special allowance/increase in minimum wage shall be accommodated from within the budgetary allocation for the year 2024–25 by the respective ministries, divisions, and departments,” the announcement stated.
Pension
The Ministry of Finance further instructed all pertinent organizations and agencies “to ensure that no pensioners, who have been appointed on, or after Jan 2, 1959, be allowed to draw pension in foreign exchange” in a separate notification.
It stated that there have been reports of some foreign-resident pensioners trying to draw or drawing their pension in foreign currency. It made clear that the federal government could not authorize pensioners living overseas to receive their benefits in foreign currency due to circumstances involving the nation’s current account balance. It went on, “There would be no need for such permission in view of the banking channel’s digitization and global accessibility.”
According to the ministry of finance, individuals who live overseas after retirement are eligible to receive a pension in foreign currency under Section IV of Chapter XLVIII of the Civil Service Regulations (CSR 966 CSR 973). However, the Finance Division established the protocol to be followed for pension payments in foreign currency through Pakistani embassies overseas via OM No. F. 1(10)EF(B.II)/79-2340 dated Nov. 17, 1980.
As a result, the notification stated that the Finance Division considers these rules are intended for pensioners appointed prior to January 2, 1959, and that individuals appointed on or after that date are not eligible to take their pension in foreign currency.
