Allowance and Honorarium

 Allowance and Honorarium

1. ALLOWANCE

1.1 Meaning

An Allowance is a monetary compensation paid in addition to basic pay to meet:

  • Increased cost of living

  • Special conditions of service

  • Nature, place, or duties of a post

Allowances are rule-based, not discretionary.

1.2 Important Characteristics

  • Paid from the Consolidated Fund

  • Generally linked with pay level

  • Many allowances are DA-linked

  • May or may not count as pay for retirement benefits (depends on rules)

  • Stopped during certain periods like long leave, deputation abroad, suspension, etc.

1.3 Major Types of Allowances (Illustrative)

(A) Dearness Allowance (DA)

  • Paid to neutralize inflation

  • Based on CPI (Base year 2016 = 100)

  • Revised twice a year (1 Jan & 1 July)

  • Paid on Basic Pay + NPA (if any)

  • Neutralization: 100% for all employees

(B) House Rent Allowance (HRA)

  • Paid when Government accommodation is not provided

  • Classified cities: X, Y, Z

  • Paid on Basic Pay only

  • Not admissible if:

    • Govt. accommodation is allotted

    • Employee refuses allotted accommodation

    • Spouse is allotted Govt. accommodation at same station

(C) Transport Allowance

  • For commuting between residence and office

  • Not admissible if:

    • Official transport is provided

    • Absence for full calendar month

    • Deputation abroad

  • Special provision: Double Transport Allowance for persons with benchmark disability

(D) Dress Allowance

  • Replaced uniform allowance

  • Paid annually

  • Applicable to staff required to wear uniform regularly

  • DA-linked enhancement

(E) Conveyance / Cycle Allowance

  • For posts involving extensive local travel

  • Granted post-wise, not employee-wise

  • Requires logbook / certification

  • Not admissible during leave, joining time, long tour

(F) Non-Practising Allowance (NPA)

  • For Medical & Veterinary officers

  • Paid @ 20% of Basic Pay

  • Condition: Private practice prohibited

  • Counts as Pay for all purposes

  • Pay + NPA ceiling applicable

1.4 When Allowances Are Not Admissible

  • Extraordinary Leave (in most cases)

  • Full calendar month absence

  • Deputation abroad (most allowances)

  • Suspension (subject to conditions)

  • When compensatory benefits already provided

2. FEE

2.1 Definition

Fee is any remuneration received by a Government servant for work or service rendered from a source other than the Consolidated Fund of India/State/UT.

2.2 Essential Conditions

  1. Prior permission mandatory

  2. Acceptance without permission = misconduct

  3. Governed by Conduct Rules

2.3 Government’s Share in Fee

  • If total fee in a financial year exceeds ₹5,000:

    • 1/3rd of the excess payable to Government

  • Minimum amount retained by employee: ₹5,000

  • Competent Authority may fully or partially exempt sharing

2.4 Examples of Fee (Share Applicable)

  • Royalties from books which are mere compilations of rules

  • Paid part-time employment (with permission)

  • Clerical/technical work for private bodies

  • Articles on non-literary / non-scientific subjects

  • Income from patents taken without permission

2.5 Items NOT Treated as Fee (No Sharing)

  • Scholarships/stipends during study leave

  • Fees from Universities, PSUs, Statutory bodies

  • Income from patents taken with permission

  • Amateur sports income

  • Work done on behalf of Government with payment routed through Govt.

2.6 Key Audit Focus (Fee)

  • Prior permission order

  • Calculation of Govt. share

  • Deposit of share to Government account

  • Disclosure in property returns (if applicable)

3. HONORARIUM

3.1 Definition

Honorarium is remuneration paid from the Consolidated Fund for special work of an occasional or intermittent nature, performed in addition to normal duties.

3.2 Mandatory Conditions

  • Prior sanction of Competent Authority

  • Amount fixed in advance

  • Work must be distinct from routine duties

3.3 Honorarium NOT Admissible When

  • Work is routine or due to temporary increase in workload

  • OTA is paid for the same work

  • Work relates to:

    • Holding meetings

    • Attending conferences

    • Normal official duties

    • Setting up companies/corporations

3.4 Government Share

  • No sharing

  • Full amount retained by employee

3.5 Common Admissible Cases

  • Inquiry Officer / Presenting Officer in disciplinary proceedings

  • Translation work (ordinary / technical)

  • Guest lectures & training programmes

  • Master Trainers under DoPT programmes

  • Acting as Driver / Despatch Rider (specific daily rates)

3.6 Honorarium vs OTA

  • OTA → for overtime work

  • Honorarium → for special responsibility/work

  • Both cannot be paid together for same work

4. COMPARATIVE TABLE 

AspectAllowanceFeeHonorarium
Paid fromGovt. fundsOutside Govt. fundsGovt. funds
NatureCompensatoryRemunerationSpecial reward
RegularityRegularOccasionalOccasional
Prior permissionNot alwaysMandatoryMandatory
Govt. shareNoYes (above ₹5,000)No
Counts as payMostlyNoNo
Conduct Rule impactLowHighMedium

5. ONE-LINE  DEFINITIONS

  • Allowance: Compensation attached to a post to meet service conditions

  • Fee: Remuneration from non-government sources with permission

  • Honorarium: Govt. payment for special occasional work beyond duties