The government has now streamlined how Fixed Medical Allowance (FMA) will be paid to pensioners and family pensioners covered under the National Pension System (NPS), making the process more automatic and bank-driven.
According to a recent Office Memorandum issued by the Finance Ministry dated April 16, 2026, eligible NPS pensioners will receive their medical allowance directly in their bank accounts without having to submit bills.
How will FMA be paid now?
The memorandum clarifies that the allowance will be disbursed through pension disbursing banks via their Central Pension Processing Centres (CPPCs).
“The payment of FMA to eligible NPS pensioners/family pensioners shall be disbursed by the Pension Disbursing Banks through their Central Pension Processing Centres (CPPCs),” the Finance Ministry has said in the Office Memorandum.
“The payment of FMA will be automatic and no bill is required to be submitted by the beneficiary. The CPPC will strictly follow the instructions mentioned in the Special Seal Authority issued by the CPAO for payment of FMA and any other orders issued by the Government on the subject,” it said.
This means pensioners will no longer need to follow a complicated claim process.
Quarterly credit, no paperwork needed
Once the Central Pension Accounting Office (CPAO) verifies eligibility, it will issue a Special Seal Authority (SSA) to the bank. Based on this, the CPPC will credit the allowance.
“The CPPC of the authorized bank, after receiving the Special Seal Authority for payment of FMA from CPAO, will credit the amount of FMA at the rate notified from time to time by the DoP&PW in respect of these beneficiaries in their bank account on quarterly basis as per schedule…,” the memorandum stated.
Importantly, the payment will be automatic.
“The payment of FMA will be automatic and no bill is required to be submitted by the beneficiary,” the Finance Ministry noted.
Life certificate remains mandatory
However, pensioners must submit their life certificate every year to continue receiving the benefit.
“The person drawing FMA shall submit the life certificate (Digital or Physical) every year in November…,” the memorandum said.
Failure to do so may impact payments from December onwards.
Option to switch and account transfer rules
The OM also clarifies that pensioners can switch from FMA to CGHS outpatient (OPD) facility if they choose. In such cases, existing government instructions will apply.
If a pensioner changes their bank or branch, the transfer process will follow existing CPAO guidelines.
What happens after the pensioner’s death?
The rules also simplify continuation of benefits for family members.
If the eligible family member’s name is already recorded, they can apply directly to the bank with a death certificate to start receiving FMA.
If not, they will need to apply through the concerned office for fresh authorization.
Government will reimburse banks
Banks will first disburse the allowance and later get reimbursed by the government as per the existing system.
“The amount of FMA disbursed… will be reimbursed by the Government to the banks,” the memorandum said.
Why this matters
The move reduces paperwork, speeds up payments, and ensures a smoother experience for NPS pensioners—especially elderly beneficiaries who often face difficulties with claim-based systems.
Disclaimer:
This article is based on the Finance Ministry’s Office Memorandum dated April 16, 2026, and is meant for informational purposes only. The rules and procedures mentioned are subject to official guidelines and may change over time. Pensioners and family pensioners are advised to verify details with their bank or concerned government department before taking any action.