7th Pay Commission News: The Centre last hiked Dearness Allowance (DA) for central government employees and Dearness Relief (DR) for pensioners by 4% to 50%, effective January 1, 2024. With the DA touching 50%, there were certain allowances which automatically got revised to 25% over the existing rates.
The Employees’ Provident Fund Organisation (EPFO) in a recent circular said, “Attention is drawn to the following orders issued by Department of Expenditure/DoPT in the past and request that consequent upon the increase of Dearness Allowance by 4% to 50% w.e.f. 01.01.2024, the payments of the following allowances wherever applicable may be made at enhanced rates of 25% over the existing rates w.e.f. 01.01.2024.”
Which allowances have been raised by 25%?
Tough Location Allowance:
Some geographical-based allowances, such as the Special Compensatory (Remote Locality) Allowance (SCRLA), Sunderban Allowance, and Tribal Area Allowance, have been consolidated into the Tough Location Allowance (TLA).
The regions eligible for TLA have been divided into three categories. The rates will be determined by the various cells of the R&H Matrix and will range from Rs 1,000 to Rs 5,300 per month.
Conveyance Allowance:
In mid-2017, the Ministry of Finance released a revised list of allowances and grants for Central Government employees, tied directly to the implementation of the 7th Pay Commission (7 CPC).
Although some issues with the 7 CPC persist, particularly within the Armed Forces, the House Rent Allowance (HRA) and travel allowance levels for all Central employees were adjusted.
However, many states still compensate their employees under the 6th Pay Commission provisions, resulting in differences in conveyance allowance provisions between Central and State cadres.
Special Allowance for Child of Women with Disabilities:
Following the implementation of the recommendations of the 7th Central Pay Commission, the special allowance for women with disabilities was increased from Rs 1,500 per month to Rs 3,000 per month for child care. This allowance is payable from the time of the child’s birth until the child is two years old. It applies to a maximum of the two eldest surviving children and will automatically increase by 25% whenever the Dearness Allowance on the revised pay structure rises by 50%. This change has been effective since July 1, 2017, and is applicable to all central government disabled women employees, regardless of their place of posting.
Children Education Allowance:
The amount for reimbursement of children education allowance shall be Rs 2,812.5 per month (fixed) and hostel subsidy shall be Rs 8437.5 per month (fixed) irrespective of actual expenses incurred by the government employee, according to the DoPT memorandum.
The reimbursement of children education allowance for divyang children of government employees shall be payable at double the normal rates i.e., Rs 5625 per month (fixed), irrespective of actual expenses incurred.
The rates of special allowance for child care to women with disabilities stands revised to Rs 3750 per month subject to other conditions mentioned in the office memorandum.
All these revisions are applicable with effect from January 1 2024, when the DA hike of 4% came into effect.
House Rent Allowance:
House Rent Allowance (HRA) will depend on the city in which the employee resides. Cities are categorized into X, Y, and Z, with category Z receiving the smallest increase. According to the 7th Pay Commission rules, HRA rates are set to be revised to 30%, 20%, and 10%, depending on the city category.
Regarding a separate 7th Pay Commission HRA notification, the Economic Times quoted Sanjeev Kumar, Partner at Luthra & Luthra Law Offices India, stating that according to a Ministry of Finance memorandum, there may not be a need for an additional government notification. This means the revision can be implemented directly without requiring a new notification.
Which are other allowances that have been revised?
Following the revision of the DA to 50% of the basic pay, several allowances have also been increased by 25% over their existing rates. These include Hotel Accommodation, Reimbursement of Traveling Charges for travel within the city (touring station), Reimbursement of Food Charges or Lump Sum Amounts or Daily Allowance, and allowances for journeys performed by own car, taxi, auto rickshaw, or own scooter where no specific rate has been prescribed by the Director of Transport of the concerned State or neighbouring State. Additionally, the rate of transportation of personal effects by road on transfer, Dress Allowance, Split Duty Allowance, and Deputation (Duty) Allowance have all seen a 25% increase.
How will this revision impact the existing salary and pension of employees and pensioners?
These allowances are determined by the pay band and level or grade of the employees, such as their salary and grade pay. Therefore, the impact on salary will vary based on their current salary and existing allowances.