Azad Kashmir govt announces 10% relief allowance, 7% pension hike in pro-employee budget

In a significant move amid financial constraints, the Azad Jammu and Kashmir (AJK) government has announced a much-anticipated relief package for government employees and pensioners, blending fiscal austerity with employee welfare, reported 24NewsHD TV channel Friday.

According to official notifications, all AJK government employees from BPS-1 to BPS-22 will receive a 10% ad hoc relief allowance on their basic pay, effective from July 1, 2025.

The allowance will be subject to income tax but will not count towards pension or house rent calculations. Importantly, the package extends to contractual employees, though those posted abroad will not be eligible during their foreign assignments.

In tandem, civil pensioners will receive a 7% increase in their pensions, also applicable from July 1, 2025. The raise will cover a wide range of pension types, including family, liberalised, and extraordinary pensions and will apply to net pensions after deduction of medical allowance. New retirees post-July 1 will also benefit from this increment.

Highlighting the administration's financial discipline, the notification clarified that all allowances will be disbursed from within the 2025-26 fiscal budget, and no additional grants will be issued. However, autonomous institutions may extend these benefits pending board approvals and financial evaluations.

The AJK government, despite limited financial headroom, reaffirmed its commitment to protecting the livelihoods of employees and retirees. Officials described the relief measures as a “pro-people initiative”, reiterating that providing economic support to government servants and pensioners remains a top priority.