The Department of Pension & Pensioners’ Welfare under the Ministry of Personnel, P.G and Pensions has recently issued a clarification memo in reply to various representations/references received in regard to the applicability of Dearness Relief.
The Department was dealing with the issue of whether the Dearness Relief shall be payable on the basic original pension or on the reduced pension after commutation.
Central Government servants have the option to commute a portion of their pension, not exceeding 40% of it, into a lump sum payment. No medical examination is required if the option is exercised within one year of retirement. If the option is exercised after the expiry of one year, he/she will have to undergo a medical examination by the specified competent authority.
It was clarified by the Department Under Secretary Charanjit Taneja that the Dearness Relief is payable on the original basic pension before the commutation or on the revised basic pension as per the recommendations of the Pay Commission etc., and not on the reduced pension after the commuted pension is reduced, in the Office Memorandum Dated 25th October 2022, No. 42/15/2022-P&PW(D)/1.
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