The central government has issued a new clarification regarding the payment and recovery of dress allowance for its employees. In a new circular the government stated that both new recruits and employees retiring after July 30, 2025, would get their due proportionate dress allowance money in their July 2025 salary. However, employees who retire from October 2025 onwards will face recovery of any overpayment that was already made.
Dress allowance on proportionate basis
In the circular dated September 24, 2025, the central government said: “With respect to the dress allowance to the officials retiring after July, 2025, it was mentioned in the aforesaid OM dated 16.06.2025 that a clarification was being sought from MoF and till the receipt of such clarification the prevalent instructions dated 05.03.2020 would continue to be followed in their cases.
Now, the MoF vide L.D. No. 19051/2/2025-E.IV Department of Expenditure, dated 16.09.2025 has advised that the payment of Dress Allowance to officials retiring in the middle of the year may also be regulated on a proportionate basis, in the same manner as prescribed for new joinees under this Department’s OM dated 24.03.2025, so as to maintain consistency and uniformity.”
Clarifications on payment and recovery
The government said that the payment of the dress allowance has been made along with the pay and allowances for the month of July, 2025. Accordingly, the dress allowance would already have been disbursed to all entitled employees, including those retiring in the middle of the year, either at full rates or half the rates.
In view of the fresh instructions of the DoE, the government has decided to supersede the previous order dated March 5, 2020 and June 16, 2025 as under:
a) The entitled officials retiring in the middle of the year for uniform will be paid proportionate dress allowance with effect from June 2025.
b) Recovery of excess proportionate amount from those employees whose retirement falls in October 2025 onwards may be made from the pay and allowances for the month of October 2025.
c) No recovery would be effected from those who have already retired as on date or who are due to retire on September 30, 2025.
Dress Allowance for new recruits
The government said that with regard to the payment of dress allowance to newly recruited officials joining after July 2024, it was observed that in some circles, the dress allowance for the last year has not been included in the pay and allowances of July 2025.
Reiterating the rule, the circular stated that all new recruits who joined between June 2025 and July 2024 are entitled to dress allowance in accordance with the instructions dated June 16, 2025.
