7th Pay Commission (Dearness Relief Hike): New DR notification puts more money in hands of pensioners!

By: |
Updated: October 28, 2021 10:50 AM

The Central Government has increased the rate of Dearness Relief (DR) to 31% from 28% for Central Government pensioners/family pensioners.

7th pay commission dearness relief hikeRepresentative image

The Central Government has increased the rate of Dearness Relief (DR) to 31% from 28% for Central Government pensioners/family pensioners. The increased rate of DR will be applicable with effect from July 1st, 2021.

In an Office Memorandum (O.M.) dated 27th October 2021, the Department of Pension and Pensioners’ Welfare (DoPPW) said: “President is pleased to decide that the Dearness Relief admissible to Central Government pensioners/family pensioners shall be enhanced from the existing rate of 28% to 31% of the basic pension/family pension (including additional pension/family pension) w.e.f 01.07.2021.”

The official DR hike notification comes days after the Finance Ministry increased the rate of Dearness Allowance for Central Government Employees to 31% with effect from July 1st, 2021.

Who will benefit?

According to the O.M, the increased rate of DR will be applicable to the following categories of pensioners/family pensioners:

  • Civilian Central Government Pensioners/Family Pensioners including Central Govt. absorbee pensioners in PSU/Autonomous Bodies in respect of whom orders have been issued vide this Department’s OM No. 4/34/2002-P&PW(D)Vol.II dated 23.06.2017 for restoration of full pension after the expiry of commutation period of 15 years.
  • The Armed Forces Pensioners/Family Pensioners, Civilian Pensioners/Family Pensioners paid out of the Defence Service Estimates.
  • All India Service Pensioners/Family Pensioners.
  • Railway Pensioners/family pensioners.
  • Pensioners who are in receipt of provisional pension.
  • The Burma Civilian pensioners/family pensioners and pensioners/families of displaced Government Pensioners from Burma/ Pakistan, in respect of whom orders have been issued, vide this Department’s OM No. 23/3/2008-P&PW(B) dated 11.09.2017.

ALSO READ | More cash in hand for Central Government Employees before Diwali!

Calculation of fractions

The DoPPW said that the payment on account of Dearness Relief involving a fraction of a rupee shall be rounded to the next higher rupee.

The O.M. further said that it will be the responsibility of the pension disbursing authorities, including the nationalized banks, etc. to calculate the quantum of DR payable in each individual case.

Earlier this month, the Central Government increased the dearness allowance rate to 31% of basic pay from 28%. In an official notification, the Finance Ministry also said that the Basic Pay for calculation of DA as per the new rate would include the pay drawn as per the recommendation of the 7th Pay Commission. It would not include any other type of pay.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1YOUR QUERIES: INCOME TAX: No tax benefit on loss on FD due to insolvency of finance company
2Your Money: ‘Good’ and ‘bad’ debts: Know the differences
3Equity investing: What’s your strategy in this volatile market?