Government approves 15% Disparity Reduction Allowance from March 1

February 23, 2022: The Ministry of Finance and Revenue on Wednesday notified that the Federal Government had approved a grant of 'Disparity Reduction Allowance' of 15 percent of the basic pay of basic pay scales 2017 with effect from March 1.

"This allowance shall be admissible to civil employees in BPS 1-19 of the Federal Government, (including employees of the Federal Secretariat, attached departments and subordinate offices), who have never been allowed additional allowance/allowances equal to or more than 100 percent of the basic pay (whether frozen or not) or performance allowance subject to the following conditions," the ministry notification said.

The ministry said,"This allowance will not be admissible to the employees of the organizations, who are drawing additional allowance/allowances equal to or more than 100 percent of the basic pay (whether frozen or otherwise)."

According to the notification, the allowance would be frozen at the level drawn on March 1, 2022 and would also be subject to income tax.

It said,"This allowance will be admissible during leave and the 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," the notification said, adding it would not be admissible to the employees during the tenure of their posting / deputation abroad.

"The 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."

The allowance would also be admissible during the period of suspension, it added.

The term "Basic Pay" would also include the amount of Personal Pay granted on account of annual increment(s) beyond the maximum of the existing pay scales, the notification said.

APP