Govt raises minimum special allowance to Tk1,500 for civil servants, Tk750 for pensioners in FY26 budget

The interim government has approved an increase in the minimum special allowance for public servants and pensioners in the budget for the upcoming fiscal year of 2025-26, according to an announcement made at a press conference following an Advisory Council meeting today (22 June).

The minimum special allowance for government employees will rise from Tk1,000 to Tk1,500, while pensioners will receive a minimum of Tk750, up from Tk500, Finance Adviser Salehuddin Ahmed and Finance Secretary Khairuzzaman Mozumder jointly confirmed at the press conference.

To accommodate this increase and other welfare initiatives, the Advisory Council has approved an additional allocation of Tk10,000 crore to the country's social safety net programmes, bringing the total budget for the sector to Tk91,297 crore for FY26.

Officials said that the additional funds will be used primarily to support enhanced special allowances for active government employees and pension benefits for retired personnel.

Besides, those having a net pension of Tk17,388 or more will get 10% of their pension as special allowance, while those having net pension below this amount will get 15% of their pension as special allowance, said a press release.

The government has also agreed to issue separate orders for the armed forces, the judiciary and the MPO-included teachers regarding special allowance, the press release added.  

Earlier today, the Advisory Council approved the Tk7.90 lakh crore national budget for FY26, making only minor adjustments to the proposal placed earlier this month.

Notably, the provision allowing black money to be legalised through investment in flats and buildings has been scrapped.

The budget was finalised at a meeting chaired by Chief Adviser Muhammad Yunus. It will come into effect on 1 July.