Gratuitous Allowance Law and Legal Definition

A gratuitous allowance is an allowance granted voluntarily to a pensioner by a public entity. A pensioner has no vested interest in a gratuitous allowance because of its complimentary nature. Hence, a gratuitous allowance is not given on a contractual basis.

The following are examples of case law on gratuitous allowance:

A retirement plan that is based on voluntary contributions from member employees represents a delayed compensation for services rendered in the past, due under a contractual obligation inuring to the employee's benefit. Therefore it is not a gratuitous allowance in which the pensioner has no vested right. [Robinson v. Taylor, 342 Ark. 459 (Ark. 2000)]

Where a pension is a mere gratuitous allowance, springing from the generosity and appreciation of the grantor for a past service, a pensioner has no vested right and the pension is terminable at the will of the grantor.[Driggs v. Utah State Teachers Retirement Bd., 105 Utah 417 (Utah 1943)]