Govt Merges Past Relief Allowances into Pensions for Retirees from July 2025
Federal government employees set to retire from July 1, 2025 will see a significant change in how their pensions are calculated, following the approval of a new relief package.
According to a memorandum issued by the Ministry of Finance, all federal pensioners—new and existing—will now receive uniform percentage increases in their pensions. More importantly, five separate ad-hoc relief allowances granted over the past 13 years will be absorbed into the core pension amount.
Past Allowances Now Permanent
The allowances being merged date back to 2011 and were previously given on top of the basic pension. They include:
- 2011: 15% ad-hoc relief
- 2015: 7.5% ad-hoc relief
- 2022: 15% ad-hoc relief
- 2023: 17.5% ad-hoc relief
- 2024: 15% ad-hoc relief
Combined, these adjustments amount to roughly 70% of the basic pension value.
Shift to “Net Pension” as the New Base
Under the updated rules, the “net pension” — calculated after removing certain lump-sum components from the gross pension — will serve as the baseline. The absorbed allowances will then be added to this net figure, effectively raising the permanent monthly pension for future retirees.
Officials say this step aims to streamline pension calculations and ensure consistency in annual pension increases, which in the past varied depending on when an employee retired.
This move also reduces reliance on temporary relief measures, making pension increases more predictable for government retirees in the years ahead.
