Centre forms panel to study enhanced allowance for retired employees

To examine fixed medical allowance from Rs. 500 per month and increasing `Constant Daily Allowance’, paid to those with 100 p.c. disability, from Rs. 3,000 to Rs. 6750 per month.

The Union government has constituted a high-level committee to examine enhancement of `Constant Daily Allowance’, paid to retired employees with 100 per cent disability where the person is completely dependent on somebody else for day-to-day functions, from Rs. 3,000 to Rs. 6750 per month and fixed medical allowance to retired employees from Rs. 500 per month.

Constant Daily Allowance is paid only if disability is attributable to or aggravated during the course of service. A notification issued by the Department of Personnel and Pensions said that the Committee would also examine the `fitment formula’ on revision of pension.

Follow-up to CPC recommendations

The decision is a follow-up to the recommendations of the Seventh Central Pay Commission which among other issues had examined the principles which should govern the structure of pension and other retirement benefits.

On Fixed Medical Allowances, the Commission had noted that it was enhanced from Rs.300 per month to Rs.500 per month from November 2014 and hence further enhancement of this allowance is not recommended. However the government has decided that it be examined by a Committee comprising Finance Secretary and Secretary (Expenditure) as Chairman and Secretaries of Home Affairs, Defence, Posts, Health & Family Welfare, Personnel & Training and Chairman, Railway Board as Members. Till a final decision is taken based on the recommendations of the Committee, Fixed Medical Allowance shall be paid at existing rates.

Constant Attendance Allowance

On Constant Attendance Allowance, the Commission had recommended that it may be increased by a factor of 1.5 i.e. to Rs. 6,750 per month. It had said that the allowance needs further increase by 25 per cent each time DA rises by 50 per cent.

The government has decided that it would be examined by a Committee comprising Finance Secretary and Secretary (Expenditure) as Chairman and Secretaries of Home Affairs, Defence, Posts, Health & Family Welfare, Personnel & Training and Chairman, Railway Board as Members. Till a final decision is taken based on the recommendations of the Committee, Constant Attendance Allowance shall be paid at existing rates.

Revision of pension

On revision of Pension, the Commission recommended two formulas. It had said that pension for all the civilian personnel including Central Armed Police Forces (CAPF) shall first be fixed in the Pay Matrix being recommended by this Commission, on the basis of the Pay Band and Grade Pay at which they retired, at the minimum of the corresponding level in the matrix.

This amount shall be raised, to arrive at the notional pay of the retiree, by adding the number of increments he / she had earned in that level while in service, at the rate of three per cent. Fifty per cent of the total amount so arrived at shall be the revised pension.

Second calculation

The second calculation to be carried out is as follows. The pension, as had been fixed at the time of implementation of the VI CPC recommendations, shall be multiplied by 2.57 to arrive at an alternate value for the revised pension.

“Pensioners may be given the option of choosing whichever formulation is beneficial to them. It is recognized that the fixation of pension as per formulation in (i) above may take a little time since the records of each pensioner will have to be checked to ascertain the number of increments earned in the retiring level. It is therefore recommended that in the first instance the revised pension may be calculated as at (ii) above and the same may, be paid as an interim measure. In the event calculation as per (i) above yields a higher amount, the difference may be paid subsequently,” it had said.

The government has said that both the options recommended by the 7th Central Pay Commission as regards pension revision be accepted subject to feasibility of the implementation. A Committee comprising Secretary (Pension) as Chairman and Member (Staff), Railway Board, Member (Staff), Department of Posts, Additional Secretary & Financial Adviser, Ministry of Home Affairs and Controller General of Accounts as Members would take a call on this recommendation.