ISLAMABAD — In what comes as welcome news for thousands of federal employees, the government has approved an 85 percent hike in the house rent allowance, marking one of the biggest financial relief measures in recent years.
According to reliable sources, the Ministry of Finance has given the green light to the proposal, which is expected to be presented before the federal cabinet for final approval in the coming days. Once ratified, the increase will apply to all permanent and contract employees from Grade 1 to Grade 22.
Officials confirmed that under the new policy, the house rent allowance will now be calculated based on the current basic pay, replacing the outdated system that used the 2008 pay scale as its benchmark. This change will significantly boost the take-home salaries of government workers, many of whom have been struggling to keep up with rising rents and inflation.
Economic observers note that this move represents the largest revision in the house rent allowance in over a decade, reflecting the government’s intent to ease financial pressure on its workforce amid persistent inflation and a challenging cost of living.
Sources within the Finance Division expressed optimism that once the cabinet gives formal approval, the revised allowance will “offer tangible relief to employees” and help them cope with escalating housing expenses.
The decision has been widely welcomed by public sector employees, who view it as a long-overdue acknowledgment of their economic hardships.
