Health allowance to govt employees: Only patient care providers are entitled: MoF

ISLAMABAD: The Ministry of Finance has issued a fresh office memorandum revising the eligibility criteria for the grant of health allowance to federal government employees, strictly limiting it to those directly involved in patient care, in line with a recent judgment of the Supreme Court of Pakistan.

According to the memorandum, issued in partial modification of earlier notifications dated February 2012, the Supreme Court in its judgment dated July 4, 2024 (Civil Appeals No. 302–315 of 2024, Federation of Pakistan vs Ehsan ul Haq etc.) clarified that the term “delivering health services” applies only to the provision of direct clinical care to patients.

The Court specified that eligible categories include doctors (medical and dental), allied specialists, pharmacists, nurses, paramedics, and other support services personnel who directly receive, manage, and attend to patients’ health issues. It further ruled that individuals not directly engaged in patient care do not fall within the scope of “delivering health services.”

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Following the judgment, the Prime Minister has approved the implementation of these findings across the federal government. Under the revised policy, Health Allowance will be admissible subject to several conditions: it will be taxable, payable during leave and the entire period of leave preparatory to retirement (except extraordinary leave), and will not count as emoluments for pension, gratuity, or house rent calculations.

The allowance will not be payable during posting or deputation abroad, but will be restored upon repatriation at the rate applicable had the employee remained in Pakistan. It will also cease if an employee is posted away from the sanctioned post.

The rate of Health Allowance will continue to be governed by Finance Division notifications issued in February 2012 and July 2015.

The memorandum directs the Controller General of Accounts (CGA) to immediately stop Health Allowance for employees who no longer meet the eligibility criteria. Such employees may instead be granted Disparity Reduction Allowance (DRA), subject to the conditions laid down in relevant Finance Division memoranda issued between 2021 and 2025.

Accounts Offices have been instructed to complete the adjustment exercise within 15 days and submit compliance reports. Ministries, divisions, and departments have also been asked to ensure strict implementation of the revised criteria and circulate the instructions to all subordinate organizations.

The Finance Division has withdrawn its earlier Office Memorandum dated December 2, 2025, citing a technical fault in the E-Office system that displayed an incorrect date.

Copyright Business Recorder, 2025