The Central Government has released an official notification regarding the Dearness Relief Payment. This follows much anticipation and queries from central government employees regarding the Dearness Allowance (DA) announcement, the rate of increase for 2023, and the current status of the DA.
Latest Update On April 3, 2023, a notice set the Dearness Allowance (DA) for Central Government workers at 32% of basic pay, starting January 1, 2023. Earlier in the news on December 12, 2022, mentioned a 4% rise in Dearness Relief (DR) starting July 1, 2022. DR applies to retired central government workers’ basic pension before any deductions, as explained by the Department of Pension & Pensioners’ Welfare.
The 7th Pay Commission
The central government set up the 7th pay commission in 2016 to review the salaries and allowances of all central government employees, including pensioners. The commission submitted its recommendations to the government in March 2019, and the new salaries and allowances came into effect from January 2020. Pensioners were among the biggest beneficiaries of the 7th pay commission, with their pensions increasing by a minimum of 24 %. In addition, the government also decided to index pensions to inflation, which will further boost pensioners’ incomes in the future.
What This Means for Central Government Pensioners
The Seventh Central Pay Commission’s (CPC) recommendations will directly impact the pensions of central government employees.
- The commission has recommended a two-tier pension system for central government employees, with those recruited before 2004 being placed in the first tier and those recruited after 2004 being placed in the second tier.
- The first-tier pensioners will continue to receive their pensions as per the current rules, while the second-tier pensioners will receive a lower pension based on their length of service and last drawn salary.
This means that if you are a central government employee set to retire after 01 January 2004, you can expect to receive a lower pension calculator than what you would have received under the old rules. This is likely to have a significant lifestyle of central government pensioners, who will need to adjust their expenditures to cope with this reduction. It is vital to be aware of this change and plan accordingly.
7th Pay Commission Latest Update
In response to the 7th Pay Commission’s recommendation, a few state governments, including Assam, Haryana, Uttar Pradesh, Odisha, Karnataka and Rajasthan, have increased Dearness Allowance for their state employees. DA has been hiked since Diwali, and now Central government employees are waiting for the subsequent hike.
There Is Now a Question – When Will Central Government Employees Receive Their Subsequent DA Increase?
The Dearness Allowance (DA) is hiked twice a year – once in January and once in July. This year, however, the Centre announced the first DA hike will be in March and the second one in September. As per this news government employees will receive their next DA raise in March 2023. The Centre is also expected to increase DA by 3 to 5 % .
In March 2022,, the government increased DA from 31 % to 34 %, benefiting ₹47.68 lakh government employees and ₹68.62 lakh pensioners. Almost 6 months after the first DA hike, the next phase was announced in September 2022. In the last DA hike, the Centre increased Dearness Allowance and Dearness Relief by 4 %, taking the DA hike from 34 % to 38 %. On 30 March 2022, the first DA hike was announced, and on 28 September 2022, the second DA hike was announced. As per this trend, the next hike is expected to be announced in March 2023, about six months from now.
Conclusion
In light of rising inflation, prices of essential commodities and the recommendations of the 7th Pay Commission, the Centre is likely to increase the DA by 3 to 5 % . Let Vakilsearch help you with your salary plans and learn more about your scheme! Let us help you understand this more clearly by providing you with basic legal advice.
FAQ:
1. Is the dearness allowance announced by the central govt?
Yes, the Central Government has officially announced the dearness allowance. Retail inflation reached a 15-month high in July. So, reports suggest the government might raise the dearness allowance (DA) by 3% to 45% from July 1, 2023. The last DA increase was in March 2023, when it went up by 4% to 42%.
2. What is the latest news for dearness allowance for central government employees?
On April 3, 2023, India's Finance Ministry announced a new Dearness Allowance (DA) rate for Central Government employees, effective from January 1, 2023. The updated DA is 32% of the basic pay. DA helps government employees manage inflation and is adjusted twice yearly, in January and July, using the consumer price index (CPI).
3. What is the DA increase for the central government in 2023?
The Central Government plans to raise the dearness allowance (DA) to 45% from July 1, 2023. Previously, from January 1, 2023, the DA was set at 32% of basic pay.
4. What is dearness allowance news for Central?
The central government has issued a notification about the Dearness Relief Payment, providing clarity on the DA for central employees.
5. What is the current DA status?
The current DA status has been updated and detailed in the recent notification issued by the Central Government.
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