07-05-2025
Public servants' housing allowance increased: new rates effective from last month
The Kanku Road Housing Development in Isipingo.
Image: Isipingo ratepayers
The Department of Public Service and Administration(DPSA) has officially announced an upward adjustment to the housing allowance for public servants.
According to Circular No. 15 of 2025, the revised allowance, implemented per the Public Service Coordinating Bargaining Council (PSCBC) Resolution 1 of 2025, took effect at the beginning of last month.
Effective from that date, the monthly housing allowance for qualifying public servants will increase from R1 784.55 to R1 900.00.
The housing allowance, as contained in the Public Service Coordinating Bargaining Council (PSCBC) Resolution 7 of 2015 (clause 4.6), provides that the amount of the housing allowance shall be adjusted annually based on the average Consumer Price Index (CPI) for the preceding financial year.
The policy on housing allowance also outlines specific conditions for employees who do not own a home, which include that tenants with legal rental agreements appointed before May 27, 2015, will continue to receive a direct R900 monthly allowance.
The remaining R1000 will be saved in the Government Employees Housing Scheme's (GEHS) Individual-Linked Savings Facility (ILSF), which is managed by the National Treasury.
For employees appointed on or after May 27, 2015, will have the full R1 900 housing allowance diverted into the ILSF, promoting savings towards future homeownership.
Earlier this year, Moses Moshi, the spokesperson for the DPSA, told this publication that every month, an average of R164 million of ILSF savings (Housing Allowance benefit) is processed, albeit not exclusively for homeownership.
He said this included employees who withdraw because of retirement, being medically boarded, end of contract, death or reversals.
Before 2015, when the ILSF was not yet in existence, the housing allowance benefit was being paid directly to employees irrespective of whether they are homeowners or tenants.
From March 2016 to the end of January this year, when employees who are not homeowners had their housing allowance benefit saved in the ILSF, the cumulative savings amounted to over R28 billion as at the end of January this year.
From 2015 to the end of January this year 555 892 housing allowance withdrawals were processed through the ILSF to the value of R11 billion.
The secular said that PERSAL has been directed to effect the adjustments on the system to ensure seamless implementation, while national and provincial departments are expected to fund these increases from their existing budget allocations.
The Government Employees Housing Scheme (GEHS), along with the annual subsidy adjustments, reflects the government's ongoing commitment to improving the living conditions of public servants and to encouraging responsible homeownership through structured savings mechanisms.
According to Moshi, before 2015, public servants received the housing allowance as part of the condition of service benefit for years.
However, he said this allowance was not being used by several employees to acquire homes. Hence, in 2015, the government (as the employer) and labour signed the Public Service Coordinating Bargaining Council (PSCBC) Resolution 7 of 2015, to establish a (GEHS).
According to the department, the challenges concerning the housing allowance benefit, which impact on homeownership by government employees, was that the majority of employees who receive the housing allowance benefit are those at levels 1 – 7 (as at 31 December 2024 equalling to 638 836) and mostly did not qualify for mortgage bonds at commercial banks and also, do not qualify for social housing programmes of government.
'The current finance products are too expensive for most government employees who fall within the gap market. As such, a market product needs to be developed for this segment of employees so that they can also become homeowners.
"This would require collaboration between government, government entities, development finance institutions and the commercial housing finance sector to develop such products that would accommodate these employees market.'
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