Social safety net: 6 allowance rates to be revised in line with inflation, committee formed for review

New rates will be fixed for six types of social safety net allowances. The new rates will be aligned with the rate of inflation.

The allowances in question are: old-age allowance, allowance for the widow and the women whose husband deserted her, disability allowance, education stipend and livelihood development programme for marginalised communities, mother and child benefit programme, and allowances under Employment Generation programme for the Poorest (EGPP).

To determine the revised rates, the Finance Division of the Ministry of Finance formed a 12-member inter-ministerial executive committee last Tuesday.

The committee is headed by Md Hasanul Matin, additional secretary (budget and macro division) of the Finance Division. Officials said the rates set by the committee will come into effect from 1 July this year, the first day of the 2026-27 fiscal year.

Reportedly decisions on whether the allowance rates will be increased, reduced or kept unchanged will be taken at a meeting of the advisory council committee on social security, chaired by finance adviser Salehuddin Ahmed.

The meeting is scheduled to be held at the Secretariat on 21 January. An office order issued by the Finance Division said the inter-ministerial committee will assist the advisory council committee in fixing the allowance rates.

The committee’s terms of reference include five key issues. It will conduct periodic reviews of the six allowance rates and, in determining and reviewing them, will consider the consumer price index as the primary economic indicator.

The committee will review the allowance rates once a year and submit a report with recommendations to the finance secretary, who will then place it before the advisory council committee on social security. The committee will also have the authority to co-opt one or more members if necessary.

Before the formation of the current committee, the Finance Division had constituted a nine-member committee on the same issue on 30 September last year. That committee has now been dissolved, although the terms of reference of the previous and current committees are identical.

Other members of the new committee include one joint secretary each from the Cabinet Division, the Ministry of Social Welfare, the Ministry of Disaster Management and Relief, the Ministry of Women and Children Affairs, and the Statistics and Informatics Division.

In addition, a joint chief from the General Economics Division of the Planning Commission and one director each from the Department of Women Affairs, the Bangladesh Bureau of Statistics (BBS), the Department of Social Services, and the Department of Disaster Management will serve on the committee. A deputy secretary from the Finance Division will act as the member secretary.

Compared with the previous committee, new members have been added from the Ministry of Social Welfare, the Ministry of Disaster Management and Relief, and the Department of Women Affairs.

At present, the monthly allowance for the widow and husband deserted women as well as the old-age allowance stands at Tk 650. The monthly disability allowance is Tk 900, while beneficiaries under the mother and child benefit programme receive Tk 850 per month.

In the current 2025-26 fiscal year, Tk 1,167.31 billion (Tk 116,731 crore) has been allocated to the social security sector, of which more than Tk 350 billion (Tk 35,000 crore) is for pensions.

Excluding pensions, Tk 812.97 billion (Tk 81,297 crore) has been earmarked for the social safety net, which amounts to 1.87 per cent of gross domestic product (GDP). However, according to Asian Development Bank (ADB) standards, a country should allocate around 5 per cent of its GDP to social security.