Dearness Allowance hiked to 53%: Key points on RD hike for retired govt officials

Ahead of Diwali 2024, the Union Cabinet approved a 3% hike in the Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners with effect from July 1, 2024. This hike, meant to offset price rise , will adjust the current rate of 50% of basic pay/pension to help combat the impact of inflation on the real value of wages.

Dearness Allowance (DA) is a portion of an employee’s basic pay designed to offset the impact of inflation on daily expenses. This allowance is reviewed periodically, usually every six months, to align with changes in the cost of living index. DA applies to current central government employees while DR is offered to retired persons.

Here are 9 key points on the Dearness Relief increase from 1 July 2024

A government office memorandum issued on October 30, 2024, outlined important details about the increase in Dearness Relief, which is set to take effect on July 1, 2024. Below are 9 crucial points to be aware of from this update.

i) Central Government Civilian Pensioners/Family Pensioners including Central Government. pensioners absorbed from the UAP/Autonomies for which orders were issued by OM no. 4134/2002-P&PW(D)Vol.11 of this Directorate dated 23.06.2017 for restoration of full pension after expiry or commutation period of 15 years.
(ii) Army Pensioners/Family Pensioners and Civilian Pensioners/Family Pensioners paid from Defense Service Allowances.
(iii) All India Pensioners/Family Pensioners.
(iv) Railway Pensioners/Family Pensioners.
(v) Pensioners who benefit from provisional pension
(vi) Burma Civil Pensioners/Family Pensioners and Pensioners/Families of Government Pensioners displaced from Burma/Pakistan, in respect of whom orders have been issued vide OM no. 23/3/2008-P&PW(B) of this Department dated 11.09. 2017.

2. Payment of price relief involving a fraction of a rupee shall be rounded off to the next higher rupee.

3. Payment of dearness relief arrears will not be made before the pension/family pension payment date of October 2024.

4. Other provisions governing the grant of DR for employed family pensioners and re-employed Central Government pensioners will be regulated in accordance with the provisions contained in Rule 52 of the CCS (Pensions) Rules 2021 and OM no. 45 of this Department. /73/97- P&PW (G) of 2.7.1999 with periodic amendments.

5. The provisions regarding the regulation of the RD in case a pensioner benefits from more than one pension will remain unchanged.

6. In the case of retired judges of the Supreme Court and High Courts, necessary orders will be issued by the Department of Justice separately.

7. It will be the responsibility of the pension paying authorities, including nationalized banks etc., to calculate the amount of DR to be paid in each individual case.

8. The offices of the Accountant General and the authorized pension disbursing banks are requested to arrange payment of price relief to pensioners/family pensioners on the basis of these instructions without waiting for further instructions from the Comptroller and Auditor General of India and the Reserve Bank of India, in view of letter no. 528-TA, II/34-80-11 dated 23/04/1981 of the Comptroller and Auditor General of India addressed to all Accountants General and Reserve Bank of India Circular no. GANB no. 2958/ GA-64 (ii) (CGI,)/81 dated May 21, 1981 addressed to the State Bank of India and its subsidiaries and all nationalized banks.

9. In respect of pensioners/family pensioners of the Indian Audit and Accounts Department, these orders are issued in consultation with the Comptroller and Auditor General of India as mandated under Article 148(5) of the Constitution of India .