The Central Government has issued a clarification for pensioners regarding dearness relief. The government, while clarifying on the DR, has told the pensioners the correct method of calculation.
The Central Government has issued a clarification for pensioners regarding dearness relief. The Department of Pension and Pensioners’ Welfare under the Ministry of Personnel Public Grievances and Pensioners has informed about the benefits of DR. DoPPW has given this clarification through a memorandum issued on October 25, 2022.
On behalf of the department, it has been said in the statement that many applications were sent to clarify whether dearness relief is payable on basic pension or reduced after commutation on pension.
The department has now clarified that dearness relief is given on basic pension before commutation and not on reduced pension after deduction of commuted pension. Abhinay Sharma, Managing Partner, ASL Partners informed that Dearness Relief entitlement will still be calculated on full pension.
As per Rule 52 of the CCS (Pension) Rules, 2021, pension against rising inflation and dearness relief on family pension is given to all pensioners. However, there is a lack of clarity in the matter of commutation as the commuted pension amount is deducted from the basic pension every month during the commuted period. Since dearness relief is linked to basic pension, the final pension (including DR) will be different. That too if DR is calculated on all basic pension or after deduction of commuted pension.
It is worth noting that last month, the central government had increased dearness allowance and dearness relief by 4 percent for government employees and pensioners. Higher DA and DR for central government employees and pensioners is applicable from July 2022. The additional financial impact on account of this hike of dearness relief to pensioners is estimated to be Rs 6,261.20 crore per annum and the expenditure is estimated at Rs 4174.12 crore in the financial year 2022-23. This will benefit more than 1 crore government employees and pensioners.
