8th Pay Commission News: The Centre is yet to make any major announcements regarding the appointment of key members and the finalisation of the Terms of Reference (ToR) for revising salaries and other benefits for more than one crore central government employees and pensioners. Ever since the central government announced the 8th Pay Commission in January this year, there have been lots of speculations around the likely fitment factor that would ultimately decide the quantum of rise in salaries for the staff. Since much has been said about likely salaries and pensions of the employees, we will draw readers’ attention to likely changes in allowances under the 8th Pay Commission.
The 34th SCOVA (Standing Committee of Voluntary Agencies) indicated that the 8th Pay Commission, like past commissions, would propose restructuring not only salary but also key allowances. The meeting took place in March this year. Preparations are being made for major changes in the main allowances. These allowances include major allowances like HRA (House Rent Allowance), Travel Allowance, Dearness Allowance (DA), and Medical Allowance.
Fixed Medical Allowance may rise to Rs 3,000
In the 34th meeting of SCOVA held on 11 March 2025 at Vigyan Bhavan, New Delhi, a proposal was passed to increase the Fixed Medical Allowance (FMA) for pensioners from the current Rs 1,000 to Rs 3,000 per month.
Why is the increase necessary?
The amount of Rs 1,000 currently being received is considered very inadequate compared to today’s inflation and rising cost of treatment. Many pensioners had appealed to the government to increase it.
When will it be implemented?
This increase is likely to come into effect from January 1, 2026, as it has been recommended to be included in the Terms of Reference (ToR) of the 8th Pay Commission. This means that now it will not just be a suggestion, but will become a part of the official review.
Increase in fitment factor
In the previous commission, the fitment factor was 2.57 times, which fixed the minimum wage at Rs 18,000. Now there are reports that the government is considering increasing it from 2.8 to 3.0 times. If this happens then the minimum wage can reach Rs 26,000 to Rs 27,000 and the pension can also increase from the current Rs 9,000 to around Rs 25,000. However, this has not been officially confirmed yet.
Possible changes in HRA, travel allowance and other allowances
According to reports, the government is working on the new rates and structure of HRA (House Rent Allowance), transport allowance and other allowances.
Also read: Tepid response: Window for guaranteed pension extended by 3 months
HRA rates may be kept higher in metro cities
TA (Travel Allowance) calculation may be different for employees posted in rural or semi-urban areas
Some obsolete allowances may be abolished
According to reports, the government is already considering removing several old and irrelevant allowances to make the system more transparent and practical.
Plan to merge DA into basic pay
Another major change that is in discussion is the merger of Dearness Allowance (DA) into basic pay. While this will not make much difference to the total salary of the employees, future increases in DA rates may be limited.
Delay in implementation possible
However, the official announcement of the 8th Pay Commission has not been made yet and the Terms of Reference (ToR) have also not been notified.
According to reports, it usually takes 18–24 months from the formation of the commission to the implementation of the recommendations. In such a situation, it is likely that these recommendations may not be implemented from January 1, 2026, but may be delayed a little further.
Summing up…
Preparations are being made for not only a salary hike but also comprehensive changes in allowances for the 8th Pay Commission. It has to be seen that if the government tries to come out of the old pattern and prepares a structure of more realistic and useful allowances. Especially for pensioners, the increase in medical allowance is relief news. Now all eyes are on the official announcement of the 8th Pay Commission members and its ToR.