ISLAMABAD: The federal government has decided to increase the housing rent allowance for government employees by 85 percent, a major relief measure aimed at addressing rising living costs.
The Finance Ministry has formally approved the increase, which will soon be presented to the federal cabinet for final approval.
According to sources, the summary detailing the raise will be discussed in the upcoming cabinet meeting, after which the decision will be implemented across all government departments.
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Increase applicable to Grades 1 to 22: The increase in the house rent allowance will apply to all government employees from grade 1 to grade 22, ensuring benefits for both junior and senior officials. Importantly, the decision will cover both permanent and contract employees, broadening its reach to a significant portion of the federal workforce.
Officials in the Ministry of Finance stated that the revised allowance will be calculated based on the current basic salary, marking a major shift from the previous system where house rent was determined on the basic pay scale of 2008.
For years, government employees had been receiving house rent based on outdated salary figures from 2008, which did not reflect inflation or the surge in housing costs across the country.
Sources confirmed that the updated calculation will significantly improve the take-home income of employees, particularly those in lower grades who have been most affected by high rental rates.
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