The Department of Expenditure under the Ministry of Finance has clarified the calculation of Gratuity and cash payment in lieu of leave for Central Government employees retired during the period from January 2020 to June 2021. Regarding the payment of Dearness Allowance DAi from January 1, 2020 to June 30, 2021, and to state that although the percentage of DA during the stated duration shall remain at 17 percent of basic pay, the same has been increased to 28 percent of basic pay, which includes additional installments due on January 1, 2020 (4 percent), July 1, 2020 (3 percent), and January 1, 2021 (4 percent) with effect from July 1, 2021.
According to the regulations of the Central Civil Services (Pension) Rules 1972, DA is counted as payment for the sake of calculating gratuity on the date of retirement or death. In addition, pay payable on the day of retirement and DA on that date are considered for calculating the total cash payment in lieu of leave under the CCS (Leave) Rules 1972.
In accordance with the terms of the aforementioned Ministry directives dated 23.04.2020 and 20.07.2021, gratuity and cash payment in lieu of leave for Central Government employees who retired on or after 01.01.2020 and up to 30.06.2021 should be calculated using the DA rate of 17% of basic salary.
By specifying the aforementioned gratuity calculation and leave encashment, the Official Memorandum (OM) of the Ministry of Finance confirms that "Keeping in view that gratuity and cash payment in lieu of leave are one-time retirement benefits admissible to employees on retirement and employees who retired during the period from 01.01.2020 to 30.06.2021 have been allowed lesser amount than what would have been calculable but for the aforesaid orders of this Ministry dated 23.04.2020 and 20.07.2021, the matter has been considered sympathetically with a view to allowing the same to such employees."
The OM has further clarified that in respect of Central Government employees who retired on or after 01.01.2020 and up to 30.06.2021, the amount of DA to be taken into account for the calculation of gratuity and cash payment in lieu of leave will be deemed to be as under:
|Employees retiring during the period||Notional percentage of Dearness Allowance (DA) for calculation purpose|
|From 01.01.2020 to 30.06.2020||21% of basic pay|
|From 01.07.2020 to 31.12.2020||24% of basic pay|
|From 01.01.2021 to 30.06.2021||28% of basic pay|