Allotment System Law and Legal Definition

Allotment system refers to the practice of dividing money into small portions. In the U.S., allotment system works as an above-the-line deduction, much like social security or income tax payments, that will continue until formally revoked. The Department of Defense's regulations in the U.S. states that the "allotment system is provided to help Military Service members adjust their personal and family finances to military service," which may include deployment to foreign countries or remote locations for extended periods of time.

Further, in Oregon, the allotment system is expressly made applicable to the administration of Public Assistance Law. The Oregon Department of Administrative Services makes allotments to state officers and agencies of appropriations and funds pursuant to the allotment system. For the purposes of the allotment system, each fiscal year is divided into four quarterly allotment periods, beginning, respectively, on the first days of July, October, January and April. The department prescribes a different period suited to the circumstances or may exempt agencies that have demonstrated to the department's satisfaction that the appropriate fiscal controls are in place.