MPs have voted in favour of two government motions aimed at restoring Westminster allowances worth about £500,000 to Sinn Fein's five MPs.
Sinn Fein has five seats at Westminster
The allowances were withdrawn last year after allegations of IRA involvement in the Northern Bank robbery.
Prime Minister Tony Blair said the government was implementing the recommendations of the Independent Monitoring Commission's report.
The move has been criticised by the Democratic Unionist Party.
The debate on Sinn Fein's allowances lasted several hours on Wednesday afternoon.
Speaking during prime minister's questions, Nigel Dodds, DUP MP for North Belfast, asked Mr Blair how the government could justify restoring Sinn Fein's allowances.
"Giving the confirmation of continued illegality, criminality, spying and racketeering, practiced and sanctioned at the highest level, by senior members of Sinn Fein/IRA; will the prime minister note what was in the IMC report and read it instead of spinning it?" he said.
However, Mr Blair said the government was acting in a "fair and balanced" way.
"It is absolutely correct that they (the IMC) draw attention to (IRA) criminal activity and we made it clear that was a significant problem," he said.
"However the report also says of the IMC: 'We are of the firm view that the present PIRA leadership has taken the strategic decision to end the armed campaign and pursue the political course which it has publicly articulated.'
"So if one's being fair and balanced, I think both things have to be put into the equation.
"They also go on to recommend specifically the lifting of the financial sanctions imposed against Sinn Fein. Now these were imposed in March 2005 after a previous IMC report.
"This is an IMC report saying it is right now to lift those. That's why we are acting as we are."
The government had also proposed paying Sinn Fein £80,000 a year assistance for the party's representative business.
Sinn Fein's Conor Murphy said the party was entitled to the money.
"The allowances that are afforded to people isn't dependent on anyone sitting at Westminster," the Newry and Armagh MP said.
The Independent Monitoring Commission was set up by the British and Irish governments in January 2004 to monitor the activity of paramilitary organisations.
It also monitors the "normalisation" of security measures in Northern Ireland.
Its four commissioners come from Northern Ireland, the Republic of Ireland, Britain and the US.
Both payments will be backdated to November last year.
Earlier on Wednesday, David Liddington, Conservative spokesman on Northern Ireland, said the oath of loyalty to the Queen should be re-examined, if it would mean Sinn Fein MPs taking their seats in the House of Commons.
Mr Lidington said a general commitment to uphold the law and democratic politics could be considered as an alternative to the compulsory oath.
However, Sinn Fein's Martin McGuinness said he did not envisage any circumstances ever in the future in which any Sinn Fein MP would take their seat.
Mr McGuinness said, while it was quite legitimate for Sinn Fein elected representatives to go to Westminster to engage with other parties, they did not recognise the right of the British Parliament to rule over any part of Ireland.