7th Pay Commission News: In a major development that will impact the perks of central government employees, the Centre has revised the rules for dress allowance. As per the revised guidelines, new employees joining the job after July 1, 2025, will also benefit. The Postal Department has issued a new order on dress allowance, providing clarity to retired and newly recruited employees.
According to the order issued on September 24, 2025, employees joining or retiring mid-year will now be paid dress allowance on a proportionate basis.
What is Dress Allowance?
Dress Allowance is a perk provided by the government to employees who are required to wear uniforms while on duty. According to a Finance Ministry circular in August 2017, it subsumes previously separate allowances, such as clothing allowance, basic equipment allowance, uniform maintenance allowance, gown allowance, and shoe allowance.
Approval from the Ministry of Finance
An earlier order issued in June 2025 stated that clarity had been sought from the Ministry of Finance for employees retiring after July 2025, and until then, the old 2020 rules would remain in effect. Now, the Ministry of Finance has clarified that just as newly recruited employees are paid dress allowance based on the year, employees retiring mid-year will also receive a proportionate dress allowance.
The allowance is paid with the July salary
The Postal Department stated that since the dress allowance is paid with the July salary, many retiring employees this year have already received the full or half of the allowance. Therefore, under the new rules, additional payments will be recovered from employees retiring from October 2025, if necessary. However, no recovery will be made from employees retiring before September 30, 2025.
Clarification for new employees
Furthermore, the department has clarified that new employees joining before July 2025 will receive dress allowance payments as per the rules in effect until June 2025. It was observed in some circles that the previous year’s dress allowance was not included in the July 2025 salary, and instructions have now been given to correct this.
Relief for employees
This order will provide relief to employees who join or retire mid-year, as they will no longer face any confusion regarding their dress allowance.