Proportion of allowance reduced (5)
I believe the answer is:
ratio
'proportion' is the definition.
(I've seen this before)
'allowance reduced' is the wordplay.
'allowance' becomes 'ration' (I've seen this before).
'reduced' means to remove the last letter.
'ration' with its last letter taken away is 'RATIO'.
'of' is the link.
(Other definitions for ratio that I've seen before include "Proportion of one thing to another" , "eg 1:3" , "Eg, 4 to 3" , "Proportion between two numbers" , "figures in relationship" .)