The government has issued an Office Memorandum (OM) directing a 15% Disparity Reduction Allowance provision for federal employees in grades 1 through 19 with effect from March 1, 2022.
According to an OM published by the Ministry of Finance on Wednesday, it is directed to convey the federal government’s consent for the grant of Disparity Reduction Allowance at 15% of the Basic Pay Scales 2017 w.e.f. March 1, 2022.
This allowance will be available to federal civil employees in BPS 1-19 (including employees of the Federal Secretariat, attached departments, and subordinate offices) who have never been granted additional allowance/allowances equal to or greater than 100% of 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 organisations who are drawing additional allowance/allowances equal to or more than 100% of the basic pay(whether frozen or otherwise).
- This allowance will be frozen at the level drawn on 1st March 2022.
- This allowance will be subject to income tax;
- This allowance will be admissible during leave and the entire period of LPR except during extraordinary 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 the annual increment (s) beyond the maximum of the existing pay scales.
All the principal accounting officers and heads of the departments are requested to ensure the compliance of this OM in letter and spirit.
