Tax-Free ₱7,000 Medical Allowance 2025: The Philippines government has introduced a tax-free ₱7,000 medical allowance in 2025 for qualified government employees, providing significant financial relief to help cover healthcare expenses.
This newly approved allowance, part of Executive Order No. 64 issued in 2024, marks a major milestone in enhancing the welfare of public sector workers. It aims to support government personnel in managing medical costs through cash subsidies or health maintenance organisation (HMO) enrolments.
This article provides a detailed overview of the ₱7,000 medical allowance, including eligibility criteria, its benefits, application and reimbursement process, payment structure, and the allowance’s broader impact on employee health and productivity.
Introduction to the ₱7,000 Medical Allowance Program
Recognising the increasing cost of medical services and the importance of a healthy workforce, the Philippine government authorised the provision of a medical allowance of up to ₱7,000 per year for qualified government employees.
The Department of Budget and Management (DBM), under Budget Circular 2024-6, oversees the program’s implementation, covering employees from a wide range of public sector agencies including National Government Agencies (NGAs), State Universities and Colleges (SUCs), Government-Owned and Controlled Corporations (GOCCs), Local Government Units (LGUs), and Local Water Districts (LWDs).
This allowance aims to:
- Help offset health-related expenses such as hospitalisation, diagnostic tests, and medication.
- Facilitate enrolment or renewal of HMO coverage for employees.
Eligibility: Who Can Receive the ₱7,000 Medical Allowance?
The program covers various types of government workers, regardless of employment status:
- Regular employees (permanent full-time workers)
- Casual and contract workers employed by government agencies
- Elective and appointive officials holding government positions
- Employees of LGUs, GOCCs, SUCs, and Local Water Districts
However, Job Order (JO) and Contract of Service (COS) personnel are excluded, as they do not hold a formal employer-employee relationship under civil service regulations.
Usage Options for the Medical Allowance
Beneficiaries may utilise the ₱7,000 medical allowance in one of two ways:
1. Enrollment in or Renewal of HMO Plans
Employees can use the allowance to pay for a comprehensive HMO package covering consultations, hospitalisation, emergency visits, laboratory services, and medications. The government agencies may coordinate with HMO providers to facilitate enrolments.
2. Direct Cash Reimbursement
For employees unable or unwilling to enrol in an HMO plan, the allowance can be claimed to reimburse out-of-pocket medical expenses such as hospital bills, doctor fees, prescriptions, and diagnostic tests. Claims are processed with submitted receipts and other supporting documents.
Covered Medical Expenses
| Category | Examples |
| Consultation Fees | General practitioner and specialist fees |
| Diagnostic Services | Blood tests, X-rays, imaging, screenings |
| Hospitalisation | Room charges, surgeries, emergency care |
| Medication | Prescribed drugs and medical supplies |
| HMO Premiums | Enrollment or renewal payments |
Claimants must ensure expenses are incurred within the allowable guidelines to qualify for reimbursement.
Application and Reimbursement Process
- Submit medical bills, receipts, or HMO enrolment documents to the government agency’s Human Resource or Personnel Office.
- Complete and file reimbursement claims using prescribed forms.
- The agency verifies and approves requests before processing payments to the employee’s bank account.
- Reimbursements are typically processed within 30 working days.
Government agencies are tasked with assisting employees in compliance and claims processing to ensure smooth implementation.
Funding and Budget Allocation
For FY 2025, the Department of Budget and Management allocated about ₱9.5 billion to fund the medical allowance for all qualifying government employees nationwide. This sizeable budget reflects the government’s commitment to prioritising healthcare welfare and workplace wellbeing.
Benefits and Long-term Impact
- Alleviates Financial Burden: The allowance reduces the personal cost of healthcare for government workers, encouraging timely medical care.
- Promotes Healthier Workforce: Improved access to health services supports employee wellness and reduces absenteeism.
- Boosts Morale and Productivity: Enhanced medical benefits contribute to higher job satisfaction and performance.
- Encourages Preventive Healthcare: HMO enrolment provides access to preventive services, helping detect illnesses early.
Budget Secretary Amenah Pangandaman emphasised that these measures are “a vital investment in safeguarding a healthy workforce and ensuring service excellence.”
Summary Table: ₱7,000 Medical Allowance for Philippine Government Employees
| Aspect | Details |
| Allowance Amount | Up to ₱7,000 per year |
| Eligible Beneficiaries | Regular, casual, contractual, appointive, elective govt employees |
| Excluded | Job Order (JO) and Contract of Service (COS) workers |
| Usage | HMO enrolment or direct medical expense reimbursement |
| Covered Expenses | Consultations, diagnostics, hospitalisation, medications |
| Application Process | Submit receipts or enrolment proof to government agencies |
| Budget Allocation | ₱9.5 billion for FY 2025 |
| Processing Time | Approx. 30 working days for reimbursements |
Conclusion
The tax-free ₱7,000 medical allowance for Philippine government employees starting 2025 underscores the government’s dedication to employee welfare and healthcare accessibility.
Providing both HMO support and cash reimbursements, the program flexibly meets varied needs, promoting healthier, more productive government personnel.
Eligible employees are encouraged to understand the application process, keep appropriate medical receipts, and collaborate with their agencies to maximise benefits.
FAQs
1. Who is eligible for the ₱7,000 medical allowance?
Regular, casual, contractual, appointive, and elective government employees excluding Job Order and Contract of Service personnel.
2. How can the medical allowance be used?
It can be used for enrolling in HMOs or reimbursing direct medical expenses.
3. What medical expenses qualify for reimbursement?
Consultations, diagnostics, hospitalization, prescribed medications, and HMO premiums.
4. How do I apply for the allowance?
Submit medical receipts or HMO enrolment documents to your government agency’s HR or personnel office.
5. Is the ₱7,000 medical allowance taxable?
No, the allowance is tax-exempt and is a non-taxable benefit.
