The Center clarifies the DA for the calculation of gratuities for central government retirees

The central government has issued clarifications regarding the dearness allowance (DA) for the calculation of gratuities and the collection of leave for central government pensioners who retired between January 1, 2020 and June 30, 2021. According to the last Office Memorandum (OM) issued by the Expenditure Department of the Ministry of Finance, the gratuity and leave of government employees who retired during the period will be cashed without applying the frozen DA for this period.

Simply put, for retirees who retired between January 1, 2020 and June 30, 2021), the gratuity and leave will be cashed in retaining the DA installments advertised for that period.

Clarifying the applicable DA for the calculation of gratuity and cashing out of leave, the MoF office memorandum states: “Keep in mind that gratuity and cash payment in lieu of leave are retirement benefits single eligible retired employees and employees who retired during the period from 01.01.2020 to 30.06.2021 were authorized an amount less than what would have been calculable but for the above-mentioned decrees of this ministry of 23.04 .2020 and 20.07.2021, the matter has been sympathetically considered with a view to allowing the same to these employees.”

In accordance with the new order, those who retired from January 1, 2020 to June 30, 2020, their DA will be considered 21% (17 + 4) while those who retired from July 1, 2020 to December 31, 2020 – their DA will be considered 24 percent (17 + 4 + 3).

Meanwhile, who retired from January 1, 2021 to June 30, 2021, his applicable DA will be 28% (17+4+3+4). However, this enhanced CD will only apply to the calculation of the gratuity and the collection of leave.

In accordance with the existing provisions contained in the Central Civil Service (Pension) Rules 1972, AD at the date of retirement or death are treated as emoluments for the purpose of calculating the gratuity. In addition, in accordance with the existing provisions contained in the CCS (Leave) Rules 1972, the qualifying remuneration at the date of retirement plus DA thereon is taken into account for the purpose of calculating the cash payment in lieu of leave.

As a result of the Covid-19 pandemic, the central government had decided to freeze DA and DR benefits for central government employees and retirees from the said period. The center had said it would continue to advertise the DA as it did before, but the increased DA and DR will not be added to the monthly payments for central government employees and retirees.

The center announced 4% DA for January to June 2020, 3% DA for July to December 2020 and 4% DA for the period January to June 2021.

However, while reinstating the DA and DR benefits for central government civil servants and pensioners from 1 July 2021, it was found that due to the freeze of the DA from January 2020 to June 2021, pensioners will receive a gratuity and money for leave at 17% DA. But, after this decree, retirees who retired from January 1, 2020 to June 30, 2021, will benefit from the same gratuities and leave collection benefits that they would have obtained without the DA freeze.

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