The Ministry of Finance has revised the eligibility criteria for the approval of the health allowance for federal employees, restricting it only to those individuals who are directly involved in patient care. This decision has been taken in line with a recent order of the Supreme Court of Pakistan.
According to sources, this amendment partially modifies the earlier orders issued in February 2012. In its decision dated July 4, 2024, the Supreme Court clearly stated that the provision of health services applies only to personnel who are directly engaged in providing medical care to patients.
Under the ruling, the list of eligible individuals includes medical and dental doctors, allied specialists, pharmacists, nurses, paramedics, and other supporting staff who directly participate in patient care and the management of health-related issues. Individuals who are not involved in direct patient care will not fall under the definition of providing health services. The Prime Minister has approved the implementation of this decision.
Under the new policy, the health allowance will be taxable and will remain payable during leave periods, including pre-retirement leave. However, it will not be counted for the calculation of pension, gratuity, or house rent.
The allowance will not be payable during overseas postings or duty assignments, but upon return and residence in Pakistan, it will be restored at the previous applicable rate. If an employee is posted away from their sanctioned post, the allowance will be discontinued.
The rate of the health allowance will remain unchanged as per the Finance Division notifications issued in February 2012 and July 2015.
Sources further stated that the Controller General of Accounts has been instructed to immediately discontinue the health allowance for ineligible employees. Such employees may instead be granted a Disparity Reduction Allowance under the Finance Division notifications issued between 2021 and 2025.
Accounts offices have been directed to complete these adjustments within 15 days and submit a compliance report. Ministries, divisions, and departments have been instructed to ensure strict implementation of the revised criteria and to issue necessary directions to all subordinate offices.
According to sources, the Ministry of Finance has also withdrawn its earlier notification dated December 2, 2025, after it appeared with an incorrect date in the e-office system due to a technical error.
