Big news for central government employees! Dearness Allowance amount to calculate gratuity, leave encashment enhanced –Check out the new table

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New Delhi: The Department of Expenditure under the Ministry of Finance has released an Office Memorandum regarding the calculation of gratuity and cash payment in lieu of leave for the central government employees.

The subject line reads central government employees retired during the period from January 2020 to June 2021 –calculation of gratuity and cash payment in lieu of leave.

“…in regard to payment of Dearness Allowance (DA) during the period from 01.01.2020 to 30.06.2021 and to say that in terms thereof while the rate of DA during the said period shall remain at 17 percent of basic pay, the same has been enhanced to 28 percent to basic pay subsuming additional instalments arising on 0.1.01.2020 (4 percent), 01.07.2020 (3 percent) and 01.01.2021 (4 percent) payable with effect from 01.07.2021,” reads the OM.

The OM further noted that as per the existing provisions contained in Central Civil Services (Pension) Rules 1972, DA on the date of retirement or death is reckoned as emoluments for the purpose of calculation of gratuity. Also as per existing provisions contained in CCS (Leave) Rules 1972, pay admissible on the date of retirement plus DA on that are reckoned for the purpose of calculation of cash payment in lieu of leave.

In view of the provisions of the aforesaid orders of this Ministry dated 23.04.2020 and 20.07.2021, calculation of gratuity and cash payment in lieu of leave in respect of central government employees who retired on or after 01.01.2020 and upto 30.06.2021 are required to be made based on the rate of DA at 17 percent of basic pay.

Keeping in view that gratuity and cash payment in lieu of leave are one-time benefits admissible to employees on retirement and employees who retired from 01.01.2020 and upto 30.06.2021 have been allowed lesser amount than what would have been calculable bur for the aforesaid order of this ministry dated 23.04.2020 and 20.07.2021, the matter has been considered sympathetically with a view to allowing the same to such employees.

Accordingly, it has been decided that in respect of central government employees who retired on or after 01.01.2020 and upto 30.06.2021 the amount of DA to be taken into account for calculation of gratuity and cash payment in lieu of leave will be under the following:

The OM added that all other conditions as stipulated in CCS (Pension) Rules 1972 and the orders of the Department of Pension dated 26.08.2016 in respect of employees borne on National Pension System and CCS (Leave) Rules 1972, shall continue to be applicable while calculating gratuity and cash payment in lieu of leave respectively.

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