Central govt employees to get hike in DA, provisional family pension extended to one year

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According to the Central government’s new rules, Central government employees will have more benefits with regards to their pension and Dearness Allowance.

Central govt employees to get hike in DA, provisional family pension extended to one year
Even as the COVID-19 second wave hit hard, central government employees and pensioners have something to cheer about, as the Dearness Allowance (DA) of the employees will increase from July 1 and pension rules have been simplified.

Finance ministry announced that the government employees will get an increase in their Dearness Allowance from 17 percent to 28 percent.

The Department of Pension and Pensioners’ Welfare has undertaken new reforms, which will allow the pension to be sanctioned immediately on receipt of a claim for family pension and death certificate from the eligible family member. They will not have to wait for other formalities or procedural requirements to be completed.
The two moves have been taken for government employees to deal with the COVID-19 pandemic.

Pension

In view of the ongoing pandemic, the government has decided to reform the family pension rules so that family members of the employees will be able to claim a provisional pension up to a period of one year from the time of the receipt of the claim for family pension and furnishing of death certificates.

According to a Financial Express report, the provisional family pension provision will be applicable in case of death happening during the pandemic, either because of COVID or a non-COVID reason.

Previously, the family pension could only be granted to the eligible member of the family after the pension was forwarded to the Pay and Accounts Office (PAO). Similarly, previously provisional family pension was only available for a period of 6 months.

Dearness allowance hike

The 11 percent increase in Dearness Allowance will not only lead to a boost in the salary of the government servants but also increase the corpus of Provident Fund and gratuity.

"A central government servant's PF contribution is calculated on the basis of one's basic salary plus DA. As the DA will go up from existing 17 percent to around 28 percent, there will be a rise in employee and employers contribution in monthly PF contribution. This will lead to a rise in PF balance in the long-term," Mint reported quoting Kartik Jhaveri, Director — Wealth Management at Transcend consultants.

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