State Government Orders 1.5 Percent Salary Deduction For Employee Health Scheme
The State government in Hyderabad on Monday, June 29, 2026, issued official orders directing a 1.5 percent deduction from the basic pay or basic pension of all government employees and pensioners. This contribution will go toward the newly established Employee Health Care Trust (EHCT) to facilitate the implementation of the Employees Health Scheme (EHS).
Under the newly issued orders, the State government will also play an active role in financing the trust. The administration has committed to extending an equal matching contribution to the Employee Health Care Trust, matching the total amount collected from the employees and pensioners.
To ensure the smooth rollout of the deduction process, the government has sent clear directives to administrative heads. All Heads of Departments, District Collectors, and Drawing and Disbursing Officers across the State have been instructed to implement the directive. They must deduct the 1.5 percent from the basic pay or basic pension starting from the salaries and pensions of May 2026, which are scheduled to be paid in June 2026 and continue thereafter.
The directive also outlines specific rules to prevent double deductions within a single family unit. According to the state's guidelines, the deduction of the EHS contribution will be restricted to only one individual per household in cases where multiple members are employed by or retired from the government.
Specifically, the restriction applies to married couples where both the husband and the wife are active State government employees. In such cases, only one spouse will see the 1.5 percent deduction from their basic pay. Similarly, if one spouse is an active State government employee and the other is a State government pensioner, the deduction will be limited to only one of them.
Furthermore, the orders address the scenario of individual pensioners receiving multiple pension streams. In cases where a State government pensioner is currently drawing both a Service Pension and a Family Pension, the 1.5 percent deduction will be restricted to one pension only, preventing any redundant charges on their monthly retirement benefits.
