Good News For Pensioners- Govt Increases Dearness Relief to Pensioners and Family Pensioners, Know Details Here
The Centre has hiked dearness relief for the central government employees to 28% effective from 1st July 2021. In a statement, the Ministry of Personnel, Public Grievances and Pensions said that the department has issued orders for increasing the dearness relief to pensioners and family pensioners of the central government with effect from 1st July to 28% of the basic pension/family pension, representing an increase of 11% over the existing rate of 17%.
“Department of Pension & Pensioners’ Welfare has issued orders on 22.07.2021 for increasing the Dearness Relief to pensioners and family pensioners of the Central Government (including pensioners/ family pensioners of Armed Forces, All India Services and Railways) with effect from 01.07.2021 to 28% of the basic pension/family pension (including additional pension/family pension), representing an increase of 11% over the existing rate of 17%,” the ministry said.
The ministry further said in view of the unprecedented situation which arose due to Covid, three additional instalments of dearness relief to pensioners, which were due from 1st January 2020, 1st July 2020 and 1st January 2021 had been frozen. Now, the government has issued orders to increase the dearness relief to pensioners/family pensioners with effect from 1st July to 28% of the basic pension/family pension.
“The increase subsumes the additional instalments arising on 01.01.2020, 01.07.2020 and 01.01.2021. The rate of Dearness Relief for the period 01.01.2020 to 30.06.2021 shall remain at 17% of basic pension/family pension,” the ministry said.
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Let’s also take a look at the recent changes that central government employees must know
1) To provide some relief amid coronavirus pandemic, the Union government has surged the dearness allowance to 28 per cent from 17 per cent. The central government employees have been receiving 17 per cent DA since July, 2019. The Central stalled DA last year in the wake of coronavirus pandemic.
2) The revised DA will be come into effect from July, 2021. A central government employee who gets Rs 18,000 per month, will see a hike of 11 per cent in his take-home salary. His salary will jump by Rs 5,040 from July. The Dearness Allowance from January 1, 2020 to June 30, 2021 will remain 17 per cent for government employees. There will be no DA arrears for the mentioned period.
3)”The DA payable to central government employees shall be enhanced from the existing rate of 17 per cent to 28 per cent of basic pay. The increase subsumes the additional instalments arising on January 1, 2020; July 1, 2020, and January 1, 2021,” said the department of expenditure under the finance ministry.
4) As the dearness allowance is linked to the basic salary, a hike in DA will also raise the monthly provident fund (PF) and gratuity amount of the central government employees. So, PF, Travel Allowance and gratuity will go up for the employees and the pensioners.
5) Commenting on Centre’s decision to raise dearness allowance of the central government employees, Sajai Singh, Partner, J Sagar Associates, said, “This is a welcome move since coronavirus has really shaken the economic foundation of the country and DA is paid to offset inflation. Inflation affects the price of everything and it’s impact may vary marginally from location to location, so hopefully this jump will bring relief to the beneficiaries.”‘
Last week, the Union Cabinet had approved an 11 per cent hike in Dearness Allowance (DA) and Dearness Relief (DR) for central government employees and pensioners with effect from July 1, benefitting more than 48 lakh central government employees, and 65 lakh pensioners. With this, the new DA rate will be 28 per cent, up from 17 per cent.
DA hike calculation
At present, the government employees are getting a 17% DA. For example, if a government employee’s basic salary is ₹18,000, the DA is ₹3,060. With 28%, the dearness allowance will be 5,040 in a month. This calculation will be applicable from July 1.
Dearness Allowance is a component of the salary that cushions against inflation and is revised twice a year – once in January and once in July.
In April last year, the Finance Ministry had put on hold an increment in dearness allowance (DA) till June 30, 2021, due to the COVID-19 pandemic. The rate of DA from January 1, 2020, to June 30, 2021, was 17 per cent.
(With Inputs From Agencies)