Public servants to receive increased loan facilities and welfare benefits under Budget 2026

President Anura Kumara Dissanayake, in his 2026 Budget Speech, announced several new measures to provide financial and welfare benefits to public sector employees.

The President stated that the housing and property loan scheme for public servants will be restructured to allow loans up to Rs. 5 million. 

Under this revised system, Rs. 500 million will be allocated to provide loans at a 4% concessional interest rate for the first Rs. 3 million, and at a 2% interest rate for amounts between Rs. 3 million and Rs. 5 million.

To ensure the continued stability of health benefits under the Agrahara Insurance Scheme, the employee contribution rate will be revised. The minimum contribution of Rs. 125 will be increased by Rs. 75, while the monthly contributions of Rs. 300 and Rs. 600 will be increased by Rs. 150 each.

The President further proposed to increase the interest-free festival advance provided to government employees from Rs. 10,000 to Rs. 15,000.

In addition, the distress loan advance available to public servants will be increased from Rs. 250,000 to Rs. 400,000, at an interest rate of 4.2%. To ensure the smooth and timely issuance of these advances, an allocation of Rs. 10 billion has been made to expand the public servants’ advance account limit.