Finance Ministry issues circular introducing grade-based allowances for active and retired government personnel, effective from July 1

The Government of Bangladesh has announced a new special allowance for its civil servants, rather than a traditional dearness allowance. Starting from July 1, government employees will receive the benefit based on their pay grade. A circular outlining the details was issued on Tuesday, June 3, by the Regulation-3 branch of the Regulation Division under the Finance Division of the Ministry of Finance. The order, issued under the authority of the President, was signed by Additional Secretary Dilruba Shahina.

According to the circular, employees in grades 1 through 9 will receive a 10% special allowance, while those in grades 10 through 20 will be entitled to a 15% allowance. The minimum allowance for currently serving employees will be BDT 1,000 per month, while pensioners will receive at least BDT 500 per month.

This special allowance will be applicable to all individuals under the National Pay Scale, including civilian government employees, personnel of autonomous and state-owned institutions, banks, insurance companies, financial organizations, Border Guard Bangladesh, and the police force. Pensioners who are receiving reinstated pensions will also be eligible for the benefit.

For those currently on post-retirement leave (PRL), the allowance will be calculated based on their last basic salary before entering PRL, and will be provided according to the designated grade-based percentage. Pensioners with reinstated pensions will receive the allowance based on the applicable portion of their pension.

However, the special allowance will not apply to retired employees who have opted to receive their entire pension as a lump sum gratuity and are not yet eligible for reinstated pensions. Additionally, government employees currently on unpaid leave will not be entitled to this benefit.

The decision comes at a time when the government is aiming to offer financial relief and improve the welfare of public sector employees amidst ongoing economic challenges. The allowance aims to provide more targeted support based on employment grade, offering relief to both current employees and eligible pensioners.