As of the first of October 2022, Article 111 of the state's Budget for 2022 provided that civil servants and retirees in public administrations and institutions, as well those working for Electricité du Liban (EDL), water authorities, railways, and others, would receive an increase equal to a doubling of their base monthly salary.
All civil servants will also receive a cost-of-living allowance of 1,925,000 LBP.
Under this article, the total social assistance amount can be at least 5,000,000 LBP and at most 12,000,000 LBP.
According to a study conducted by the Information International research & consultancy firm, a civil servant's salary increases to 9 million and 425 thousand LBP if their base salary is 2.5 million LBP and receives the social assistance, or twice their base salary as long as it is not less than 5 million.
However, the total salary of a civil servant would be 20 million and 925 thousand LBP if the employee's base pay is 7 million LBP and receives the social assistance worth twice that amount (which cannot be more than 12 million LBP).
Before these increases, the cost of the public sector was 12 thousand billion LBP; today, it is 30 thousand billion LBP, a 60 percent increase, even though the number of employees in this sector has fallen from 320 thousand to 280 thousand as a result of retirement or leaving the job due to low pay.
The Ministry of Finance distributed the salaries with these increases to the civil servants as soon as public institutions or the concerned departments sent the payrolls.
The Ministry of Finance has secured these funds from the 2022 budget.
Since the state's administrative revenues are insufficient to cover these costs, the government will turn to the Banque du Liban (BDL) and ask for a treasury advance, forcing it to print currency.
Accordingly, any increase in employee pay, especially if it doesn't come with the necessary reforms, will cause a flood of banknotes onto the market, which will cause the US dollar's exchange rate to rise and reduce the value of the employee pay increase.