Monthly Pension Calculations: The percentage of dearness relief (DR) increases the amount of monthly pension a central or state government pensioner gets. The current DR rate is 53 per cent, as per the AICPI Index. Based on that, what can be the total pension amounts for pensioners with basic pensions of Rs 25,000, Rs 35,000, and Rs 50,000? Read to know-
How is DR for pensioners calculated?
Dearness relief for a pensioner or dearness allowance (DA) for an employee is calculated on the basis of the All-India Consumer Price Index. The base year for the current DR or DA is 2001.
What is All-India Consumer Price Index?
It is a barometer, or a statistical index used to measure the inflation rate in India. It is the main benchmark to calculate the DR and DA for central government and public sector employees.
Is DR constant for employees?
Based on the AICPI index, dearness relief is adjusted twice a year- first in January and second in July. The adjustment helps employees keep pace with the rising cost of living as their pension amount increases with every change.
Does DR change with every Pay Commission?
The base year remains the same, but the calculation of DR starts from the beginning of a pay commission. E.g, the current DR calculation started on January 1, 2016, the day when the 7th Pay Commission was implemented for central government employees. The thumb rule is that once the DR reaches at a 50 per cent, it is merged with the basic salary, and there may be two conditions- DR will be calculated again from 0, or the government may announce a new pay commission. However, either condition may not be met.
What is current DR percentage?
As of July 1, 2024, the DR for central government employees is 53%. Once the central government announces the DA rate, state governments also follow in its footsteps.
How does DR impact pension of a pensioner?
The pension amount increases in the proportion of DR. If DR is 40 per cent for a pensioner with a Rs 30,000 basic pension, their total pension will be Rs 42,000, if it is 50 per cent, their total pension will be Rs 45,000.
What are minimum and maximum basic pensions in 7th Pay Commission?
The minimum pension in the 7th Pay Commission is Rs 18,000, while the maximum is Rs 1,25,000. The pension amount changes based on the grade of the retiree. The financial pension amount is calculated after adding DR into it.
What will you calculate?
We will calculate the pension amounts for pensioners with pensions of Rs 25,000, Rs 30,000, Rs 35,000, Rs 40,000, Rs 45,000, and Rs 50,000, respectively. We will take the DR as 53 per cent.
Total pension amount for pensioner with Rs 25,000 basic pension
Dearness Relief Amount from July 2024= Rs 13,250
Total Pension from July 2024= Rs 38,250
Total pension amount for pensioner with Rs 30,000 basic pension
Dearness Relief Amount from July 2024= Rs 15,900
Total Pension from July 2024= Rs 45,900
Total pension amount for pensioner with Rs 35,000 basic pension
Dearness Relief Amount from July 2024= Rs 18,550
Total Pension from July 2024= Rs 53,550
Total pension amount for pensioner with Rs 40,000 basic pension
Dearness Relief Amount from July 2024= Rs 21,200
Total Pension from July 2024= Rs 61,200
Total pension amount for pensioner with Rs 45,000 basic pension
Dearness Relief Amount from July 2024= Rs 23,850
Total Pension from July 2024= Rs 68,850
Total pension amount for pensioner with Rs 50,000 basic pension
Dearness Relief Amount from July 2024= Rs 26,500
Total Pension from July 2024= Rs 76,500
