The central government in March this year announced DA hike by 4% for over 50 lakh government employees and 67 lakh pensioners, which resulted in an automatic revision in several allowances, including dearness allowance. After this last DA hike, effective January 2024, the key allowance now stands at 50%.
7th Pay Commission News: Finally, the uncertainty over retirement and death gratuity limit increase is over. The Department of Pension and Pensioners’ Welfare (DoPPW) has issued instructions for enhancement of maximum limit of retirement and death gratuity limit for central government employees from 20 lakh to Rs 25 lakh on reaching the dearness allowance (DA) to 50% of the basic pay, according to a recent government release.
The central government in March this year announced DA hike by 4% for over 50 lakh government employees and 67 lakh pensioners, which resulted in an automatic revision in several allowances, including dearness allowance. After this last DA hike, effective January 2024, the key allowance now stands at 50%. As rules suggest, allowances have to be revised by up to 25% when DA reaches 50% of the basic pay.
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However, there was a confusion whether this revision has been effected or not after the Employees’ Provident Fund Organisation (EPFO) in April issued a circular putting in abeyance the hike in retirement gratuity.
But, now it’s clear that the maximum limit of retirement and death gratuity limit for central government employees would be Rs 25 lakh as against Rs 20 lakh earlier, a rise of 25%.
“In implementation of the recommendations of the Seventh Central Pay Commission, the Department of Pension and Pensioners’ Welfare vide OM No. 38/37/2016-P&PW (A) (i) dated 04.08.2016 had issued instructions relating to revision of provisions regulating pension/gratuity/commutation of pension/family pension/disability pension/ex-gratia lump-sum compensation, etc,” according to a PIB release.
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As per the government’s decisions on the recommendations of the 7th CPC, the maximum limit of retirement gratuity and death gratuity would be increased by 25% on reaching the DA to 50%, it added.
Accordingly, the DoPPW, after due consultation with stakeholders, issued instructions, enhancing the maximum limit of retirement gratuity and death gratuity to Rs 25 lakh under the CCS (Pension) Rules, 2021 and the CCS (Payment of Gratuity under NPS) Rules, 2021. This enhancement will be effective from January 1, 2024.
It is to be mentioned that the retirement and death gratuity depends upon the basic pay last drawn and the length of the service rendered by the employee.
