ISLAMABAD: The federal government on Wednesday notified a 15.6 per cent increase in the minimum wages of its employees and barred payment of pensions in foreign exchange to post-1959 pensioners residing abroad.

In a notification, the Ministry of Finance said the minimum wage and gross salaries of civil employees of the federal government and the civilians paid from defence estimates had been increased from Rs32,000 to Rs37,000 per month with effect from July 1, 2024.

This increase would also be applicable to contingent paid staff and contract employees against civil posts in Basic Pay Scales on standard terms and conditions of contract employment, the notification said. “Those whose gross salary is less than Rs37,000 shall be allowed the difference as a special allowance,” it added.

The special allowance amount will be subject to income tax and will be admissible during leave and the entire period of leave prior to retirement (LPR), except during extraordinary leave.

Halts pensions in foreign exchange for post-1959 retirees abroad

The amount of special allowance will not be treated as part of emoluments to calculate pension and gratuity, and recovery of house rent and will not be admissible to the employees during the tenure of their posting or deputation abroad.

This would, however, be admissible to the employees on their repatriation from posting or deputation abroad at the rate and amount which would have been admissible to them had they not been posted abroad.

“The above 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 and no supplementary grants would be given on this account,” the notification said.

Pension

In a separate notification, the Ministry of Finance also advised all the relevant institutions 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”.

It said instances had been reported that several pensioners residing abroad were drawing or trying to draw their pensions in foreign exchange. It clarified that the situation relating to the current account balance of the country did not permit the federal government to allow pensioners residing abroad to draw pensions in foreign exchange. “Further, in view of the digitisation and worldwide accessibility of the banking channel, there would be no need for such permission,” it added.

The finance ministry explained that Section IV of Chapter XLVIII of the Civil Service Regulations (CSR 966 CSR 973) allowed the grant of pension in foreign exchange to those residing abroad after retirement. However, the Finance Division, vide OM No. F. 1(10)EF(B.II)/79-2340 dated Nov 17, 1980, laid down procedure to be adopted for payment of pension in foreign exchange through Pakistani missions abroad.

Therefore, the Finance Division believes these provisions are meant for the pensioners appointed before Jan 2, 1959, whereas those appoin­ted on or after that date are not entitled to draw their pension in foreign exchange, the notification said.

Published in Dawn, August 30th, 2024