Govt employees to get special allowance from July

The interim government has announced a special allowance for government employees with effect from 1 July, according to a circular issued by the Finance Division under the Ministry of Finance on Tuesday.

Under the new provision, employees in Grade-1 and above to Grade-9 will receive a 10 percent allowance, while those in Grade-10 to Grade-20 will get 15 percent.

The allowance will be at least Tk 1,000 for in-service employees and Tk 500 for pensioners.

The benefit will apply to civil government employees under the national pay scale as well as personnel of autonomous and state-owned bodies, banks, insurance and financial institutions, Border Guard Bangladesh (BGB), and the police. Pensioners whose pensions have been reinstated will also be eligible.

Finance Adviser Salehuddin Ahmed proposed the increased allowance in the 2025-26 national budget, presented on Monday.

In his speech, he cited the absence of a revised pay structure since 2015 as the reason for introducing the measure.

The much-discussed dearness allowance did not materialise in name, but the special allowance has been introduced as an alternative.

"We are actively considering a dearness allowance," Salehuddin had earlier told reporters.

"A committee has been tasked with this. There is a fair chance, but it may take time," he added.

According to the circular, employees on post-retirement leave (PRL) will receive a special allowance based on the basic salary drawn before going on PRL. Pensioners receiving reinstated pensions will get the allowance on their current retirement, in line with their grade.

Retired employees who have withdrawn their full pension as a one-time gratuity and are not yet eligible for reinstatement will not receive the special allowance. Employees on unpaid leave will also be excluded from the benefit.