Department of Expenditure has issued O.M. dated 07.09.2021 regarding calculation of Gratuity and Leave Encashment for Central Govt. employees, who retired during the period from January 2020 to June 2021.
New Delhi: In July this year, the Centre increased Dearness Allowance (DA) and Dearness Relief (DR) paid to government employees and pensioners respectively to 28% from 17% with effect from July 1. Last year DA hike was frozen for the period January 2020 to June 2021 because of the pandemic. But the DA hike was not given retrospectively. So there was confusion among the central government employees who retired between January 2020 to June 2021 regarding the DA rate that will be applicable for the calculation of their retirement benefits like gratuity and leave encashment.
In this regard, the Union Finance Ministry on Wednesday has issued details pertaining to the calculation of gratuity and leave encashment for the central government employees, who retired during the period from January 2020 to June 2021. The amount of Dearness Allowance (DA), that is to be taken into account for calculation of gratuity and leave encashment, has also been notified by the government.
“Department of Expenditure has issued O.M. dated 07.09.2021 regarding calculation of Gratuity and Leave Encashment for Central Govt. employees, who retired during the period from January 2020 to June 2021,” Department of Pension & Pensioners’ Welfare tweeted.
Department of Expenditure has issued O.M. dated 07.09.2021 regarding calculation of Gratuity and Leave Encashment for Central Govt. employees, who retired during the period from January 2020 to June 2021.@DrJitendraSingh @FinMinIndia @mygovindia @PIB_India pic.twitter.com/12ECkMgzYr
— D/o Pension & Pensioners’ Welfare , GoI (@DOPPW_India) September 8, 2021
The breakup of the additional 11% DA that was announced in July is 4% for January 2020 to June 30 2020, 4% for July to December 31, 2020 and 3% for January to June 30, 2021.
Office Memorandum (OM) issued by the Department of Expenditure, retirement benefits of these employees will be calculated as follows:
- As per the rules mentioned in the Central Civil Services (Pension) Rules, 1972, the DA on the date of retirement or death of the employee is reckoned as emoluments for the purpose of calculation of gratuity.
- Based on the rules, the national percentage of DA for the calculation of gratuity and leave encashment has been announced.
- For employees retired during January 1, 2020, to June 30, 2020, the applicable DA rate is 21%– 17% plus 4% for the period January 1, 2020 to June 30, 2020.
- For employees retired during July 1, 2020, to December 31, 2020, the applicable DA rate is 24%– 17% plus 4% for the period January 1, 2020 to June 30, 2020 and 4% for July 1 to December 31, 2020.
- For employees retired during January 1, 2021, to June 30, 2021, the applicable DA rate is 28%– 17% plus 4% for the period January 1, 2020 to June 30, 2020, 4% for July 1 to December 31, 2020 and 3% for January 1 to June 30 2021.
