DRA-2025: How the New Disparity Reduction Allowance Affects Compensatory Allowance
The Ministry of Finance has issued a crucial update regarding compensatory allowances for federal government employees. The new Office Memorandum (OM No.F.5(9)IMP/2025) introduces significant changes to how Disparity Reduction Allowance (DRA) affects compensatory allowances, particularly for employees on deputation.
Effective Immediately
The key change reduces compensatory allowance by the DRA amount (30% of basic pay as of June 30, 2022) for employees already receiving DRA.
Document Reference: Ministry of Finance OM No.F.5(9)IMP/2025
Dated: July 18, 2025
Key Updates at a Glance
DRA Implementation
Federal Government has granted Disparity Reduction Allowance (DRA-2025) at 30% of running basic pay as of June 30, 2022 to offices already receiving this allowance.
Adjustment Mechanism
For employees on deputation, the DRA amount will be deducted from compensatory allowance per Finance Division's OM dated November 29, 2023.
Mandatory Reduction
Offices receiving DRA must reduce compensatory allowance by DRA-2025 amount (30%) effective July 1, 2025.
Implementation Scope
Applies to all federal ministries, departments, and autonomous/semi-autonomous bodies under government control.
Detailed Policy Breakdown
Understanding DRA-2025
The Disparity Reduction Allowance (DRA) is granted at 30% of an employee's basic pay as it stood on June 30, 2022. This allowance is specifically for offices that were already receiving DRA before this update.
Impact on Compensatory Allowance
The significant change affects employees serving on deputation who receive compensatory allowance. According to the new directive:
- The DRA amount will be deducted from the compensatory allowance
- This reduction is effective from July 1, 2025
- Calculation is based on the basic pay as of June 30, 2022
Action Required Implementation Guidelines
All ministries and divisions must:
- Identify officers drawing compensatory allowance as of July 1, 2025
- Calculate the DRA amount (30% of June 30, 2022 basic pay)
- Reduce compensatory allowance by the DRA amount
- Circulate instructions to all subordinate departments and autonomous bodies
The Controller General of Accounts and AGPR have been notified for implementation.
Urdu Summary for Government Employees
حکومتی ملازمین کے لیے اہم ہدایات
وزارت خزانہ پاکستان نے وفاقی حکومتی ملازمین کے لیے معاوضہ الاؤنس میں اہم تبدیلیوں کا اعلان کیا ہے۔ دفتری یادداشت (او ایم نمبر ایف۔5(9)IMP/2025) کے مطابق:
- تفاوتی کمی الاؤنس (ڈی آر اے) 30 جون 2022 کی بنیادی تنخواہ کا 30% دیا جائے گا
- ڈیپوٹیشن پر مامور ملازمین کا معاوضہ الاؤنس میں ڈی آر اے کی رقم کاٹی جائے گی
- یہ تبدیلی یکم جولائی 2025 سے نافذ ہوگی
- تمام وزارتیں/ڈویژنز اپنے ماتحت محکموں کو ان ہدایات کی اطلاع دیں
تمام متعلقہ دفاتر کو یکم جولائی 2025 سے معاوضہ الاؤنس میں مطلوبہ کمی یقینی بنانی ہوگی۔ وزارت خزانہ کی ویب سائٹ پر مکمل دفتری یادداشت جلد اپ لوڈ کی جائے گی۔
Compliance & Next Steps
The Finance Division has instructed all ministries/divisions to immediately circulate these instructions to departments, autonomous bodies, semi-autonomous bodies, and corporate bodies under their administrative control.
Official Documentation
The complete Office Memorandum will be uploaded to the Finance Division's website for reference. Government employees are advised to:
- Consult with department's accounts office for personalized impact assessment
- Review July 2025 payslips to verify correct implementation
- Contact Finance Division for clarification if needed
These changes represent the government's ongoing effort to standardize allowance structures across federal organizations while ensuring fair compensation for employees serving on deputation.