Published On: Mon, Nov 30th, 2015

Seventh Pay Commission delights pensioners, dismayed employees

New Delhi: This should cheer central government pensioners but central government employees are dismayed by what Seventh Pay Commission did report.

Seventh Pay Commission Chairman Justice A K Mathur

Seventh Pay Commission Chairman Justice A K Mathur

With the Seventh Pay Commission headed by Justice A K Mathur recommendations of the new pension rules, the pensioners can expect a higher pension packet from next year.

Retired employees from the central government service will get a 24 per cent increase in benefits, while the pay increase for central government employees is 16 per cent.

However, central government employees will get a boost in House Rent Allowance (HRA), which takes the hike in this segment to more than 100 per cent. The government will increase the House Rent Allowance from the date of implementation of the pay commission recommendations, not from January next year.

In such a situation, pensioners would be the biggest gainers from the pay commission award, which starts next year, January 1.

Older pensioners have an added reason to rejoice. The seventh Pay Commission recommended a virtual one rank one pension (OROP) structure for central government pensioners, bringing in parity between past and existing pensioners.

“The commission recommends a revised pension formulation for civil employees including Central armed police forces personnel as well as for defence personnel, who have retired before 01.01.2016. This formulation will bring about parity past pensioners and current retirees for the same length of service in the pay scale at the time of retirement,” the Seventh Pay Commission said in its report.

This formulation will bring about parity between past pensioners and current retirees for the same length of service in the pay scale at the time of retirement.

The past pensioners shall first be fixed in the new pay matrix which has been suggested in place of pay band and grade pay at which they retired, at the minimum of the corresponding level in the pay matrix. This amount shall then be raised to arrive at the notional pay of retirees, by adding number of increments he/she had earned in that level while in service at the rate of 3 per cent. Fifty percent of the total amount so arrived at shall be the new pension.

An alternative calculation will be carried out, which will be a multiple of 2.57 times of the current basic pension. The pensioner will get the higher of the two. However the sixth Pay Commission recommended for additional pension with advancing age.

The Seventh Pay Commission revised the maximum gratuity to Rs 20 lakh from the earlier Rs 10 lakh. It will be raised by 25 per cent whenever dearness allowance goes up by 50 per cent but Sixth Pay Commission increased to Rs 10 lakh from Rs 3.5 lakh.

The commission has introduced Health Insurance Scheme for pensioners as well as central government employees. Commission has also proposed that the Central Government Health Scheme (CGHS) be strengthened so that pensioners living in areas which do not have CGHS dispensaries get access to empanelled hospitals and receive treatment on a cashless basis.


Copyright: Any unauthorized use or reproduction of The Sen Times’ above content for any purpose is strictly prohibited and constitutes copyright infringement liable to legal action. Please share this article with others using the link, do not cut & paste the article. See our Copyright Policy for more detail.

About the Author