The Finance Division has extended the monthly M.Phil allowance of Rs2,500 to federal government employees who hold degrees declared equivalent to an M.Phil qualification by the Higher Education Commission (HEC). The decision broadens the eligibility framework for the allowance, which was previously limited to employees holding HEC-recognized M.Phil degrees. Under the latest decision, employees possessing an equivalent qualification can also receive the allowance, provided they meet the prescribed requirements and submit an official equivalence certificate issued by HEC.
The decision was communicated through an Office Memorandum issued by the Finance Division on September 14, 2026. According to the memorandum, the extended benefit applies to employees who acquire or already possess a qualification that has been recognized by HEC as equivalent to an M.Phil degree. The allowance will take effect from July 17, 2026. The requirement for an equivalence certificate means that employees seeking the benefit will need to provide documentary confirmation from HEC establishing that their qualification is equivalent to the M.Phil level.
The Finance Division said the M.Phil allowance is currently fixed at 25% of the existing Ph.D. allowance. This places the monthly M.Phil allowance at Rs2,500, while the Ph.D. allowance stands at Rs10,000 per month. The allowance was initially sanctioned for employees holding HEC-recognized M.Phil degrees under a Finance Division memorandum issued on July 1, 2016. The original policy included specific conditions governing eligibility and payment of the allowance to federal government employees.
The latest memorandum represents a change from the Finance Division’s position communicated in November 2025 regarding qualifications considered eligible for the allowance. In a memorandum dated November 24, 2025, the Finance Division had clarified that the M.Phil allowance was specifically intended for employees holding an M.Phil degree. At that time, it stated that no other qualification, whether declared equivalent by HEC or otherwise, had been placed at par with the M.Phil degree for the purpose of receiving the allowance.
The November 2025 clarification also noted that HEC equivalence was generally used for purposes including recruitment and admission to universities. As a result, employees holding other qualifications that could be considered equivalent for academic or professional purposes were not automatically eligible for the M.Phil allowance under the earlier interpretation. The September 2026 memorandum now provides a specific mechanism through which employees holding an HEC-recognized equivalent qualification can qualify for the same monthly benefit.
Under the original 2016 policy, the Rs2,500 monthly allowance was available to employees possessing an HEC-recognized M.Phil degree, subject to the conditions outlined by the Finance Division. The allowance was also not admissible to employees who were already receiving the Ph.D. allowance of Rs10,000 per month, among other restrictions. These conditions remain relevant to the administration of the allowance as the eligibility framework is expanded to include HEC-recognized equivalent qualifications.
The September 2026 memorandum specifically directs that the allowance available to M.Phil degree holders may also be extended to federal government employees possessing an HEC-recognized equivalent qualification. However, the employee must produce an equivalence certificate to establish that the qualification meets the required standard. The requirement provides a formal basis for determining whether a particular degree or qualification qualifies under the revised policy.
The memorandum was issued by the Implementation section of the Finance Division and circulated among federal ministries and divisions. The decision provides federal government departments with updated instructions for processing claims involving employees holding HEC-equivalent qualifications. By extending the allowance to recognized equivalent degrees, the Finance Division has revised the scope of the benefit while retaining the requirement for formal HEC verification through an equivalence certificate.
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