China has decided to increase allowances for disabled servicemen, families of soldiers killed in action and ex-Red Army soldiers in rural areas, by 10 percent, an official circular said on Sunday.

The new pension scheme will take effect on Oct. 1, the civil affairs and finance ministries said in a circular.

Ex-servicemen in rural areas would also get an annual increase of 480 yuan (70.6 U.S. dollars) per person, the circular said, adding that the increase would be funded by the central budget.

After the adjustment, which has been the 17th increase since 1978, the most seriously disabled servicemen would have an annual allowance of at least 26,870 yuan, up more than 2,400 yuan above that of last year, it said. The allowance is more than 80 percent of the national average wage in 2009.

The circular said the central government would use about 580 million yuan to cover the allowance hike, and 21.06 billion yuan had been allocated this year for it, covering 6.19 million people.