Good News to Central Government employees and pensioners: Cabinet approved an increase in the DA and Dearness Relief from 17% to 28%.

Cabinet approved an increase in the DA and Dearness Relief to 28%: With effect from July 1, 2021, the Cabinet Committee chaired by Prime Minister Narendra Modi has approved an increase in the Dearness Allowance for Central Government employees and Dearness Relief for pensioners to 28 per cent, an increase of 11 per cent over the existing rate of 17 per cent of the Basic Pay/Pension.

Due to the COVID-19 pandemic in the country, 3 additional instalments of Dearness Allowance (DA) for Central Government workers and Dearness Relief (DR) for pensioners, due on January 1, 2020, July 1, 2020, and January 1, 2021, were frozen.

With effect from July 1, 2021, the government has decided to enhance the Dearness Allowance for Central Government workers and Dearness Relief for pensioners to 28%, an increase of 11% to the existing rate of 17% of Basic Pay/Pension.

The increase reflects the additional instalments arising on 01.01.2020, 01.07.2020 and 01.01.2021. The rate of Dearness Allowance/Dearness Relief for the period 01.01.2020 to 30.06.2021 shall remain at 17%

The increase reflects the additional instalments due on January 1, 2020, July 1, 2020, and January 1, 2021. For the period 01.01.2020 to 30.06.2021, the Dearness Allowance/Dearness Relief rate will continue at 17 per cent.

DA and Dearness Relief calculation formula

For Central Government employees, the formula for calculating Dearness Allowance is as follows:

Dearness Allowance % = {(Average of AICPI (Base year 2001=100) for the past 12 months – 115.77)/115.77}*100

For Central public sector employees, the formula for calculating Dearness Allowance is as follows:

Dearness Allowance % = {(Average of AICPI (Base year 2001=100) for the past 3 months – 126.33)/126.33}*100

Both pensioners and their families are entitled to DA, which continues after reemployment with the Central or State Government.

If a pensioner works while overseas, he or she will not be eligible for DA; but, if the recipient is not working, he or she will be eligible for DA.

Pensioners have been paid DA at a set proportion of their basic pension since October 1, 1984. The allowance is based on the initial pension, which does not include commutation. The percentage has been updated every six months since July 1, 1986, depending on the cost of living index. Allowance of 72 to 80 DA is possible.

Source: PIB

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