Central Employees The central government has taken an important decision for lakhs of its employees, which has further strengthened their financial security after retirement. Recently, the Department of Pension and Pensioners’ Welfare (DoPPW) has issued new clarifications on the rules related to gratuity payments. This order clarifies which employees will get the benefit of the increased gratuity limit and which will not.
What is the new provision?
The government issued a notification on May 30, 2024, in which the maximum gratuity limit for central government employees was increased from ₹20 lakh to ₹25 lakh. This decision came into effect when the dearness allowance (DA) reached 50% of the basic pay. As per the rules, when DA reaches this level, all allowances are increased by 25%. As a result, this amendment in the gratuity limit was also made.
Which employees will benefit?
According to DoPPW, this increased gratuity limit will be applicable only to employees covered under the Central Civil Services (Pension) Rules, 2021 or the Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021. This means that these employees are regular civil servants of the central government.
Who will not be affected by the new rule?
DoPPW has also clarified that this provision will not be applicable to the following institutions or organizations: employees of banks, RBI, port trusts, public sector undertakings (PSUs), autonomous bodies and universities, state governments and other societies. Employees of these organizations will need to contact their respective administrative ministry or department to clarify which gratuity rules apply to them.