The Ministry of Finance issued notifications regarding two key allowances for federal government employees, effective from July 1, 2025. These include a 10% ad hoc relief allowance and a 30% Disparity Reduction Allowance (DRA) for eligible employees.
According to the office memorandum, the President has sanctioned the Ad hoc Relief Allowance-2025 at 10% of the running basic pay for armed forces personnel, civil employees, and contract employees working in basic pay scales within federal government departments.
The allowance, which will be applicable until further notice, is subject to income tax and will not be considered in the calculation of pension or gratuity.
It will also not apply during extraordinary leave or for employees posted abroad, although those returning from such assignments will receive the same amount they would have been eligible for had they not been posted abroad.
The relief allowance will be accommodated within the existing budget allocations for fiscal year 2025-26, with no supplementary grants being provided for this purpose. The term “basic pay” includes personal pay granted for annual increments beyond the maximum of current pay scales.
In a separate development, the Finance Ministry also approved the 30% Disparity Reduction Allowance (DRA) for employees in grades BPS-1 to 22, who were already receiving the allowance as of June 30, 2022.
This allowance will be based on the relevant basic pay as of June 2022 for employees appointed before July 1, 2022. For those appointed after this date, the allowance will be calculated based on the initial basic pay scale of 2017.
