Malawi Government is expected to spend more than K3.5 billion to pay off a group of pensioners who retired between 2005 and 2009.
The High Court recently ordered that the pensioners have to be paid using the old formula instead of the new three years average formula which the group challenged.
The court made the ruling in 2009 that the pensioners have to be paid all their arrears after it was discovered that the new system gave only one-third of what was due to the pensioners.
In an interview on Wednesday, Secretary for Human Resources Sam Madula disclosed that government was working on paying off the 3 312 pensioners as directed by the court.
“Actually, we got instructions from the Chief Secretary to expedite the process and the State President [Joyce Banda] is even concerned and also interested that these people have to be paid,” he said.
Madula said initially, government could not pay the money due to financial constraints, but said with the passing of the 2012/2013 budget, the process has started and all the pensioners with arrears will be paid.
“It is a substantial amount that could not be paid out of the existing budget,” added Madula, who estimated that government would have to cough in excess of K3.5 billion to clear out the arrears.
Madula could not say when the payments will start.
In an interview, Public Servants Pensioners Association deputy Secretary General Kapanda Asefa said he was optimistic that the pensioners will be paid after getting the assurance from government.