Central govt clarification on Dearness Relief that pensioners should know

Issuing clarification on pension calculation, the Department of Pension & Pensioners’ Welfare said, “References/Representations have been received in this Department seeking clarification whether the Dearness Relief is payable on original basic pension or on pension as reduced after commutation. It is clarified that dearness relief is payable on the original basic pension before commutation or such basic pension before commutation as revised on implementation of recommendations of Pay Commission etc. and not on the pension as reduced after deduction of commuted pension.”

The clarification is expected to put rest on the confusion whether DR benefit is payable on original basic pension before commutation or on the reduced pension after commutation.

Under Rule 52 of CCS (Pension) Rules, 2021, DR benefit being given to retired central government employees and family pension beneficiaries is granted to pare the price rise. The benefit includes even those who are drawing compassionate allowance under Rule 41. It is payable half-yearly and central government announced DR allowance along with the Dearness Allowance (DA). both DA and DR increases in tandem where DA hike is applicable on working central government employees whereas DR hike is applicable on central government pensioners that include family pensioners as well.

Under 7th Central Pay Commission (7th CPC), existing or current DR rates for central government pensioners is 38 per cent, which is calculated on the basic pension before commutation and not on the reduced pension after commutation. The DR rate of 38 per cent is applicable from 1st July 2022 as central government recently announced 4 per cent DA and DDR hike.