The Ministry of Finance has issued a clarification on the treatment of Ad Hoc Relief Allowances following the revision of Basic Pay Scales 2026, stating that existing allowances will remain frozen while employees newly recruited into federal service will receive specified allowances on a notional basis. The clarification was issued by the Finance Division through an Office Memorandum after the government received numerous queries regarding the treatment of allowances following the notification of revised Basic Pay Scales and allowances for federal civil servants on July 21, 2026. The latest instructions seek to remove uncertainty over how Ad Hoc Relief Allowances will be treated under the revised pay structure and explain the applicable rates for existing employees as well as individuals joining federal service after implementation of the new pay scales.
The Finance Division reiterated that, under paragraph 7 of the earlier notification, all Special Pays, Special Allowances and allowances linked to a percentage of pay have been frozen at the level of their admissibility as of June 30, 2026. This means that the relevant allowances will not automatically increase as a result of the revision of Basic Pay Scales 2026. The clarification also specifically addressed the position of Ad Hoc Relief Allowance 2023, which had already been frozen at the level of its admissibility as of June 30, 2023. According to the Finance Division, the allowance will continue to remain frozen at that level for existing employees. The clarification is intended to ensure that the implementation of the revised pay scales does not create uncertainty regarding the basis on which previously granted relief allowances are calculated.
The government has, however, made a separate provision for employees who join federal service after the implementation of the revised pay scales. According to the Finance Division’s memorandum, new entrants will be entitled to Ad Hoc Relief Allowance 2023 on a notional basis with effect from July 1, 2026, until further orders. Employees in Basic Pay Scales 1 to 16 will receive the allowance at a rate of 35%, while officers in Basic Pay Scales 17 to 22 will receive it at 30%. The allowance for newly recruited employees will be calculated on the minimum of the relevant Basic Pay Scales 2022 rather than on the revised 2026 pay scale. The Finance Division also made clear that the allowance granted on this notional basis will remain frozen at the specified level until further orders. The arrangement therefore distinguishes between the treatment of employees already serving in the federal government and those appointed after July 1, 2026.
The memorandum also provides clarification regarding Ad Hoc Relief Allowance 2024. The Finance Division stated that this allowance will remain frozen at the level of its admissibility as of June 30, 2026. Under the clarified arrangement, employees in Basic Pay Scales 1 to 16 will continue to receive Ad Hoc Relief Allowance 2024 at 25%, while employees in Basic Pay Scales 17 to 22 will receive it at 20%. The calculation will be based on the Basic Pay Scales 2022. For employees appointed after July 1, 2026, the same allowance will be admissible on a notional basis. New employees in Basic Pay Scales 1 to 16 will receive the allowance at 25%, while officers in Basic Pay Scales 17 to 22 will receive it at 20%. In both cases, the calculation will be based on the minimum of the relevant Basic Pay Scales 2022 and the allowance will remain frozen until further orders.
The Finance Division’s clarification establishes the treatment of both Ad Hoc Relief Allowance 2023 and Ad Hoc Relief Allowance 2024 following the implementation of the revised Basic Pay Scales 2026. Existing employees will continue to receive the allowances at their applicable frozen levels, while newly recruited federal employees will receive the specified rates on a notional basis using the minimum of the relevant Basic Pay Scales 2022. For Ad Hoc Relief Allowance 2023, the applicable notional rates for new entrants are 35% for Basic Pay Scales 1 to 16 and 30% for Basic Pay Scales 17 to 22. For Ad Hoc Relief Allowance 2024, the corresponding rates are 25% and 20%. The clarification follows questions raised after the July 21 notification and provides federal departments and employees with a defined framework for applying the allowances under the revised pay structure.
Follow the PakBanker Whatsapp Channel for updates across Pakistan’s banking ecosystem.