7th Pay Commission: Govt clarifies on Dearness Relief payment rule; Check details here

The central government has issued a clarification on Dearness Relief (DR) saying that it is paid to central government pensioners on the original basic pension before commutation. The Ministry of Personnel, Public Grievances and Pensions further stated that this has come up due to a misunderstanding about whether the DR benefit is payable on the original basic pension before commutation or on the reduced pension after commutation.

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." 

To offset the price increase, retired central government employees and family pension beneficiaries are granted DR benefits under Rule 52 of the CCS (Pension) Rules, 2021. Even those receiving compassionate allowance under Rule 41 are eligible for this benefit.

Under the 7th Central Pay Commission, the DR rate for central government pensioners is currently 38 per cent. It is based on the basic pension prior to commutation, not the reduced pension following commutation. The 38 per cent DR rate will be in effect beginning July 1, 2022, as the central government recently announced a 4 per cent DA and DDR increase.

The Union Cabinet approved a 4 per cent increase in dearness allowance (DA) and dearness relief (DR) effective July 1, 2022, which will benefit 50 lakh central government employees and 65 lakh pensioners. The 4 per cent increase increased the DA and DR to 38 per cent of basic pay or pension, respectively.

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