Government Introduces New FMA Rules for NPS Pensioners; Banks to Credit Medical Allowance Quarterly

The government has issued new rules on Fixed Medical Allowance for pensioners under the National Pension System, changing how money reaches accounts. A fresh Office Memorandum from the Central Pension Accounting Office sets a standard process. Payments will now move to an automated, bank-led framework, aimed at cutting paperwork and giving eligible pensioners more predictable medical support.

New Rules Shift Medical Allowance Payments to Automated Bank Framework

Under the revised arrangement, Fixed Medical Allowance will be credited by pension disbursing banks through their Central Pension Processing Centres. After checking eligibility and details, the Central Pension Accounting Office will send a Special Seal Authority to the concerned bank. This authorises the bank to start allowance payments for each pensioner or family pensioner covered under the National Pension System.

How Fixed Medical Allowance will reach NPS pensioners through banks

Once a Special Seal Authority reaches a bank, the Central Pension Processing Centre will post the Fixed Medical Allowance directly into the pension account. Credits will be made every quarter, at the rates notified from time to time by the Department of Pension and Pensioners' Welfare. Pensioners will not need to submit separate medical bills, as payments will be released automatically based on valid government instructions.

The rules also address how pension account changes are handled. If a pensioner shifts the account from one branch to another, or moves to a different bank, existing Central Pension Accounting Office guidelines will apply. Those rules will decide how the Special Seal Authority, pension records and Fixed Medical Allowance instructions move between banks, so that payments can continue without fresh applications every time.

Compliance rules for Fixed Medical Allowance and NPS pensioners

To keep receiving Fixed Medical Allowance, pensioners must submit a life certificate once every year in November. This can be filed in digital form or on paper. Payments covering September, October and November will then be released in the first week of December. Further quarterly credits will depend on whether the life certificate has reached the bank within the required period.

The framework explains what happens after a pensioner’s death. If a family pensioner is already named in the Fixed Medical Allowance authority, the bank can begin paying that person once the death certificate is submitted. If no eligible family pensioner is recorded, the concerned office will have to issue a new authority before the bank can start allowance disbursal.

The memorandum also covers situations where a beneficiary decides to leave Fixed Medical Allowance and use CGHS outpatient facilities instead. In such cases, the existing government instructions on shifting between these two options will continue to apply. Banks will stop allowance payments when directed, while the concerned departments arrange access to CGHS services in line with current rules.

On the financial side, the government will reimburse banks for Fixed Medical Allowance payments made under this system. Central Pension Processing Centres will look after accounting entries and required reports.