Federal government approves Disparity Reduction Allowance of 25% for federal government employees

KARACHI: Federal Government has approved grant of Disparity Reduction Allowance of 25% of the basic pay with effect from March 01, 2021.

This allowance will be admissible to civil employees in BPS 1-19 of the Federal Government (including employees of the Federal Secretariat and attached departments), who have never been allowed additional allowance/allowances equal to or more than 100% of the basic pay (whether frozen or not) or performance allowance subject to the following conditions:

  • This Allowance will not be admissible to the employees of the employees who are drawing additional allowance/allowances equal to or more than 100% of the basic pay.
  • This allowance will be frozen at the level drawn on March 01, 2021.
  • This Allowance will be subject to Income Tax.
  • This Allowance will be admissible during leave and entire period of L.P.R except during extra ordinary leave.
  • This Allowance will not be treated as part of emoluments for the purpose of calculation of Pension/Gratuity and recovery of House Rent.
  • This Allowance will not be admissible to the employees during the tenure of their posting/deputation abroad.
  • This Allowance will be admissible to the employees on their repatriation from posting/deputation abroad at the rate and amount which would have been admissible to them, had they not been posted abroad.
  • This Allowance will be admissible during the period of suspension.

The term ‘Basic Pay’ will also include the amount of Personal Pay granted on account of annual increment beyond the maximum of the existing pay scales.

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