Punjab Approves 3.5% Increase in Civil Pension from July 2026:

The Government of Punjab has sanctioned a 3.5% increase in net pension for all existing civil pensioners of the Punjab Government with effect from 1 July 2026, until further orders. The circular also clarifies eligibility, family pension, overseas pensioners, shared pension liability and exclusions.

What the 3.5% Pension Increase Means:

The 3.5% increase applies to the net pension of all existing civil pensioners of the Government of Punjab from 1 July 2026 until further orders.

For this circular, “net pension” means pension being drawn minus Medical Allowance. The increase is therefore not calculated on the gross pension amount or on Medical Allowance.

The benefit extends to eligible family pension granted under the Pension-cum-Gratuity Scheme, 1954, the Liberalized Pension Rules, 1977, and pension sanctioned under the Punjab Civil Services Pension Rules. It also applies to Compassionate Allowance.

Pensioners retiring on or after 1 July 2026 are specifically excluded from this 3.5% increase. The circular also excludes Special Additional Pension allowed in lieu of pre-retirement Orderly Allowance.

Eligible Punjab civil pensioners residing abroad, except those residing in India and Bangladesh, may receive the benefit if they retired on or after 15 August 1947 and are not entitled to, or receiving, pension increases under British Government Pension Increase Acts. Payment will be made at the applicable exchange rate. The Notification Describes;

No. FD.SR-III-4-113/2026
Government of the Punjab
Finance Department

Dated: Lahore, the 22nd July, 2026.

SUBJECT:             Grant of Increase in Pension to Civil Pensioners of the Government of the Punjab.

I am directed to state that the Governor of the Punjab has been pleased to sanction an increase at 3.5% of net pension with effect from 1 July 2026, until further orders, to all existing civil pensioners of the Government of the Punjab.

2.                          The 3.5% increase in pension mentioned above shall not be admissible to pensioners who retire on or after 1 July 2026.

3.                          For the purpose of admissibility of the increase in pension sanctioned in this circular letter, “Net Pension” means “pension being drawn” minus “Medical Allowance”.

4.                          The increase shall also be admissible on family pension granted under the Pension-cum-Gratuity Scheme, 1954, the Liberalized Pension Rules, 1977, pension sanctioned under the Punjab Civil Services Pension Rules, and on Compassionate Allowance.

5.                          If the gross pension sanctioned by the Government of the Punjab is shared with any other Government in accordance with the rules in Part-IV of Appendix-III to the Accounts Code, Volume-I, the increase in pension shall be apportioned between the Government of Punjab and the other Government concerned on a proportionate basis.

6.                          The increase sanctioned in this circular letter shall not be admissible on Special Additional Pension allowed in lieu of pre-retirement Orderly Allowance.

7.                          The benefit shall also be admissible to Punjab civil pensioners residing abroad, other than those residing in India and Bangladesh, who retired on or after 15 August 1947 and are not entitled to, or are not receiving, pension increase under the British Government’s Pension (Increase) Acts. Payment shall be made at the applicable rate of exchange.

Additional Finance Secretary (Reg.),

Finance Department, Government of Punjab.

A Meaningful Relief for Eligible Pensioners:

The Punjab Government’s 3.5% pension increase offers additional financial support to existing civil pensioners from 1 July 2026. Its most important calculation rule is that the increase applies to net pension, defined in the circular as pension being drawn minus Medical Allowance. Pensioners should therefore check the net figure used by the paying office instead of applying 3.5% to gross pension without verification.

The circular also protects continuity for eligible family pensioners, Compassionate Allowance recipients and qualifying pensioners living abroad. At the same time, it draws clear boundaries: people retiring on or after 1 July 2026 are excluded, and the increase does not apply to Special Additional Pension granted in lieu of pre-retirement Orderly Allowance. Shared pension liabilities will be divided proportionately between the Punjab Government and any other government involved.

Pensioners should retain the notification and review their pension slip after implementation. If the revised amount is missing or appears incorrect, they should contact the relevant District Accounts Office, Treasury Office, Accountant General Punjab or pension-disbursing bank. The safest approach is to confirm the calculation against the circular’s definition of net pension and the pensioner’s individual records. Overall, the notification provides targeted relief while keeping the existing pension rules and eligibility conditions firmly in place.

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Frequently Asked Questions

Who qualifies for the 3.5% Punjab pension increase?

All existing civil pensioners of the Government of Punjab are covered, subject to the circular’s conditions. Eligible family pensioners and Compassionate Allowance recipients are also included.

Is the increase calculated on gross or net pension?

It is calculated on net pension. The circular defines net pension as pension being drawn minus Medical Allowance.

Are pensioners retiring after 1 July 2026 eligible?

No. The circular states that the 3.5% increase is not admissible to pensioners who retire on or after 1 July 2026.