Can both husband and wife claim HRA if one gets a government quarter? Centre clarifies the rule

Responding to a question in the Rajya Sabha, the Ministry of Finance said that when either spouse is allotted government accommodation at the same station, the family is treated as having been provided official accommodation. As a result, neither spouse is eligible to receive HRA, as there is no expenditure on rented accommodation.

The clarification comes amid questions over whether the government plans to revisit the long-standing rule, especially for couples where both spouses are government employees.

Why is HRA not paid when one spouse gets a government house?

Replying to an unstarred question in the Rajya Sabha, Minister of State for Finance Pankaj Chaudhary explained the basic principle behind the rule.

According to the government, House Rent Allowance is meant to compensate Central Government employees for the rent they incur while living in private accommodation when government housing is not available.

The reply states: “House Rent Allowance is granted to central government employees who are not provided with Government accommodation, to compensate them for expenditure incurred on hiring residential accommodation.”

The government further clarified that where both spouses are government employees posted at the same station and either of them has been allotted government accommodation, the family is considered to have been provided with government accommodation.

Since the family is already living in official accommodation, the other spouse is not considered to be incurring any rent expenditure. Therefore, HRA is not admissible.

The reply further notes: “Where both spouses are Government employees stationed at the same station and either is allotted Government accommodation, the family is considered to have been provided with Government Accommodation. Consequently, no expenditure is incurred by the other spouse on accommodation. Hence, the HRA is not admissible to them.”

Has the government received requests to change this rule?

The issue has often been raised by employee groups, with many arguing that both spouses are independent employees and should be entitled to their own allowances.

However, the Finance Ministry told Parliament that it has not received any representations from government employees or their service associations seeking reconsideration of this policy.

When asked specifically whether the government proposes to review the policy to make it more equitable for couples where both spouses are in government service, the government’s answer was straightforward: No.

This means the existing HRA rules will continue unchanged for now.

What does this mean for government employee couples?

The clarification effectively means if both spouses are central government employees and are posted at the same station, and either spouse has been allotted government accommodation, then neither spouse can claim HRA.

The government views the accommodation as having been provided to the family, rather than to an individual employee. Since HRA is a reimbursement-like allowance meant to offset rental expenses, it is not payable when such expenses do not arise because of official accommodation.

What if both spouses live in rented accommodation?

If neither spouse has been allotted government accommodation and they are living in rented accommodation, HRA may be admissible subject to the applicable rules and eligibility conditions.

Similarly, where spouses are posted at different stations and satisfy the prescribed conditions, HRA entitlement is determined under the applicable government rules based on their individual circumstances.

Recent changes in HRA rates after city reclassification

While the government has not changed the rule relating to married government employees, HRA rates themselves have undergone changes following the recent revision in city classification.

The government recently updated the list of cities for HRA purposes based on the latest population data. As a result, several cities moved into different HRA categories, affecting the allowance payable to Central Government employees posted there.

At present, HRA is paid at the following rates depending on the city of posting:

30% of Basic Pay for employees posted in X category cities.

20% of Basic Pay for employees posted in Y category cities.

10% of Basic Pay for employees posted in Z category cities.

Employees whose cities were upgraded under the revised classification became eligible for a higher rate of HRA, while those posted in cities moved to a lower category receive HRA according to the revised classification.

HRA is linked to Dearness Allowance too

Another important feature of the HRA rules is that they are linked to Dearness Allowance (DA).

Under the recommendations of the 7th Central Pay Commission, HRA rates are revised upward automatically when DA crosses specified milestones.

Initially, HRA rates were fixed at 24%, 16% and 8% for X, Y and Z category cities respectively.

When DA crossed 25%, the HRA rates were revised to 27%, 18% and 9%.

Now that DA has crossed 50%, the rates have increased further to 30%, 20% and 10%, which are the rates currently applicable.

This mechanism ensures that HRA keeps pace with rising inflation and housing costs over time.

The bottom line

The government’s latest clarification leaves little room for ambiguity. HRA is intended to compensate employees for the cost of renting accommodation. If a government employee couple is living in official accommodation allotted to either spouse at the same station, the government considers the family’s housing requirement to have already been met. Consequently, both spouses become ineligible to receive HRA, and the Centre has made it clear that it has no proposal to review or change this policy.

Disclaimer: This article is based on the Centre’s reply in the Rajya Sabha and the applicable central government HRA rules. HRA entitlement depends on an employee’s specific service conditions, posting, accommodation status and applicable government regulations. Employees should refer to the relevant service rules or consult their department for case-specific clarification.