The Finance Ministry has granted 15 percent disparity reduction allowance to the federal government employees from March 1, 2022 up to 19 grades.

The Finance Ministry has issued an office memorandum to convey the approval of the federal government with regard to grant of disparity reduction allowance of 15 percent of the pay of Basic Pay Scales 2017, w.e.f., 1st March 2022.

This allowance would be admissible to civil employees in BPS 1 to BPS 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; (a) allowance will not be admissible to the employees of the organisations who are drawing additional allowance/ allowances equal to or more than 100 percent of the basic pay(whether frozen or otherwise); (b) it will be frozen at the level drawn on 1st March 2022: (c) this allowance will be subject to income tax; (d) allowance will be admissible during leave and entire period of L.P.R. except during extraordinary leave; (e) it will not be treated as part of emoluments for the purpose of calculation of pension/ gratuity and recovery of house rent; (f) allowance will 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; (h) this allowance will be admissible during the period of suspension; (i) the term “Basic Pay” will also include the amount of Personal Pay granted on account of annual increment (s) beyond the maximum of the existing pay scales.

This story was first published in Business Recorder on February 24, 2022.