Govt. to reintroduce senior citizen interest subsidy scheme, address pension anomalies

The Cabinet of Ministers has approved a series of measures to address financial issues affecting senior citizens and retired Government officers. 

To support senior citizens, the Cabinet has decided to reintroduce an interest subsidy scheme for fixed deposits, ensuring a 10% annual return. 

“At present the interest rate for fixed deposits has declined to 8.5%. As a result, most of the senior citizen account holders have withdrawn their deposits,” Cabinet Co-Spokesman and Minister Bandula Gunawardena said at the post-Cabinet meeting media briefing yesterday. 

Although the Budget impact was not disclosed, he said if the fixed deposit rate falls to 8.5%, the Government will cover the difference.

“The market rates are now starting to fall and the Government will top up the rate to keep interest yield at 10%,” he added.

The subsidy, applicable to deposits up to Rs. 1 million for two years.

Additionally, the Cabinet of Ministers approved steps to resolve pension anomalies affecting around 83,000 former Government officials who retired between 1 January 2016, and 1 January 1 2020. 

These anomalies resulted from various policy decisions and salary revisions over the years. 

The approved resolution, presented by President Ranil Wickremesinghe in his capacity as the Finance, Economic Stabilisation and National Policies Minister, will revise the pension salaries of these retired officers, providing an increase of up to Rs. 2,500 based on the total salary as per Schedule No. I of Public Administration Circular No. 03/2016 dated 25 February 2016.

“These measures aim to provide financial relief and ensure fair treatment for both senior citizens and retired public sector employees,” he added.