Big Package for Military, Civil Servants, and Educators! Not Only a 4% Pay Raise Next Year, but Pension Adjustment of 5.89% Also Included in the Budget

On the 20th, the Executive Yuan meeting passed the central government's overall budget proposal for the next fiscal year. This includes budget allocations for a 4% across-the-board pay raise for military, civil servants, and educators, as well as a projected 5.89% adjustment for retired personnel based on the cumulative inflation rate announced in May.

The Personnel Administration Directorate stated that they will monitor the actual annual CPI (Consumer Price Index) growth rate released by the Directorate-General of Budget, Accounting and Statistics (DGBAS), and then proceed accordingly with formal adjustments.

Defense Budget Exceeds One Trillion for the First Time, Surpassing 3% of GDP

The Executive Yuan approved the 'Fiscal Year 116 Central Government Overall Budget Proposal, Affiliated Agency Budgets, and Consolidated Tables,' which will be submitted to the Legislative Yuan for deliberation by the end of August. The proposed revenue and expenditure for the next fiscal year are both set at NT$3.9266 trillion, achieving the goal of zero net new debt issuance.

The overall defense budget for the next fiscal year reaches NT$1.1225 trillion, exceeding one trillion for the first time and surpassing 3% of GDP.

The total budget proposal includes pay raises for active-duty military, civil servants, and educators, as well as retirement and pension benefits for retired personnel. According to DGBAS, to strengthen talent retention and recruitment competitiveness in the public sector, a 4% across-the-board pay adjustment is planned for military, civil servants, and educators in the next fiscal year. The central government has newly allocated NT$39.2 billion for FY116, while local governments are expected to allocate approximately NT$40.7 billion.

The FY116 central government overall budget proposal includes provisions for pay raises and retirement/pension benefits for retired military, civil servants, and educators. (Illustrative photo, photographed by Yan Lin-Yu)

With the 4% pay increase for military, civil servants, and educators in 2027, combined with the previously announced July increase of NT$2,000 each for professional and supervisory allowances, non-supervisory personnel will see a cumulative pay increase of 5.88% to 9.98%, while supervisory personnel will see increases ranging from 6.39% to 11.56%. However, the budget allocation for these professional and supervisory allowance increases requires the Executive Yuan to submit a supplementary budget bill for the current year, which must pass through three readings in the Legislative Yuan.

Regarding retired military, civil servants, and educators, since July 1, 2018, their regular retirement and pension payments no longer automatically adjust with changes in active-duty personnel compensation. Instead, a legal adjustment mechanism has been established: adjustments must be made when the 'cumulative growth rate of the Consumer Price Index published by the central accounting authority reaches ±5%' or 'at least once every four years.'

DGBAS stated that the current adjustment for retirees is initially calculated based on the 5.89% cumulative inflation rate announced in May. Zhang Qiu-Yuan, Deputy Director-General of the Personnel Administration Directorate, said after the cabinet meeting that the adjustment criteria are based on CPI annual growth exceeding 5% cumulatively and mandatory reviews every four years. For now, funding has been provisionally estimated.

Zhang added that once the actual CPI annual growth rate is officially released by DGBAS, the Personnel Administration Directorate will coordinate with the Ministry of Examination, Ministry of National Defense, and Ministry of Education to initiate relevant procedures.

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