Public sector pensioners who retired between 2020 and 2024 will receive a monthly interim allowance of Rs. 2,500 from 1 July 2027, President Anura Kumara Dissanayake proposed in the 2027 Budget.

The allowance will continue until the planned pension revision under the new 2025 basic salary structure is implemented. The final phase of the pension revision for public servants who retired before 2020 will also be carried out in 2027.

The monthly allowance for kidney patients and persons with disabilities will rise from Rs. 10,000 to Rs. 12,500. The Budget sets aside Rs. 230 billion for social protection programmes, including the continuation of Aswesuma benefits for poor and extremely poor families.

The Budget also lifts allowances for several groups of state employees. Medical officers will receive Rs. 25,000 more a month, taking their allowance from Rs. 70,000 to Rs. 95,000, and the special duty allowance for nursing officers and paramedical staff will double from Rs. 6,000 to Rs. 12,000. Half of each increase will be paid from July 2027 and the balance in 2028.

University lecturers will receive an additional Rs. 25,000 in academic allowance, with half paid from July 2027 and the rest from July 2028. Payments to visiting lecturers will rise threefold, from Rs. 1,500 to Rs. 4,500 an hour. The monthly allowance for trainee teachers at Colleges of Education will increase from Rs. 10,500 to Rs. 20,000 from April 2027.

Public officers who use private vehicles for official duties will see their monthly transport allowance double from Rs. 50,000 to Rs. 100,000. Allowances for health workers, field officers, Grama Niladharis, the armed forces, police and judicial staff will also be revised.

Background

Aswesuma is the government’s targeted welfare programme for low-income families. The Budget also allocates Rs. 25,000 million to a rural development programme under the Praja Shakthi National Movement, with priority given to poverty reduction, and Rs. 4,500 million to programmes that help selected families improve their incomes.

On public sector hiring, the President said approval has already been granted to fill 148,940 vacancies, after a review by the Cabinet-appointed Officials’ Committee on Staff Management and the Department of Management Services. About 40,000 of those appointments have been completed, and funds will be set aside to recruit a further 110,000 employees in the future.

The Budget projects a deficit of 4.5 per cent of Gross Domestic Product (GDP) and a primary surplus of 2.3 per cent, with public revenue at 15.8 per cent of GDP and total expenditure at 20.3 per cent. The current International Monetary Fund (IMF) programme is expected to conclude in March 2027, and a committee has been appointed to study the possibility of another programme.

What it means

Pensioners who retired in the 2020-2024 period will see a regular monthly payment from July 2027 while they wait for the pension revision. Families receiving the kidney patients’ and disability allowance will get Rs. 2,500 more each month once the change takes effect.

Most of the pay increases are phased, with the first half due in July 2027 and the remainder in 2028 or later, so the full effect on take-home pay will not be felt immediately. The proposals still need approval through the usual parliamentary process.