7th Pay Commission: Change in CCS Pension Rules – Gratuity, Family Pension Calculation on Death During Penalty

Necessary amendment in the CCS (Pension) Rules, 1972 will be made separately. Representative image

CCS (Pension) Rules 1972: The family pension and gratuity would not be reduced if a Central Government Employee dies while receiving reduced pay due to any penalty. According to the latest decision by the Department of Pension and Pensioners’ Welfare (DoPPW), the family pension and death gratuity would be determined basis the notional pay such employee would have been entitled to on the date of death. And such notional pay would be treated as emoluments for calculation of the family pension and death gratuity.

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The Department had received several references seeking advice as to how family pension and death gratuity in respect of a Government servant is to be calculated if s/he dies while receiving reduced pay for a specified period of time due to a penalty. In such cases, the impact of the penalty is limited to the period specified in the order of penalty and the Government servant regains his pay and increments after the period of penalty is over.

The department had also received requests for clarifications on whether in such cases, family pension and gratuity would be calculated based on the reduced pay, which the Government servant was actually drawing on the date of death or on the pay which he would have drawn if such a penalty had not been imposed on him.

After examining the matter, the DoPPW decided to use the “notional pay” for the calculation of family pension and gratuity and not the last day’s pay of such employees.

“It has, accordingly, been decided that in cases where a Government servant dies during the currency of a penalty on expiry of which he would have regained the same pay which he would have drawn if the penalty had not been imposed on him, the family pension and death gratuity in respect of such Government servant shall be determined based on the notional pay which he would have been entitled to on the date of death and such notional pay may be treated as emoluments for this purpose,” the DoPPW said in an Office Memorandum dated December 9, 2021.

The Department observed that determination of family pension and death gratuity based on actual pay drawn in case of death during the currency of a penalty would result in a reduced amount of death gratuity and also reduced family pension to the widow/family. However, this may not be the intention of the disciplinary authority while imposing that penalty.

“Therefore, in cases where the intention of the disciplinary authority was to restrict the impact of the penalty on the Government servant for a specified period only, determination of family pension and death gratuity on the basis of the reduced pay during the currency of such penalty would result in an unintended hardship to the family of the Government servant, who dies during the currency of such penalty,” the DoPPW observed.

DoPPW’s new instructions will be applicable with immediate effect and the past cases will not be re-opened. “However, the cases where the death of a Government servant has occurred before the issue of these instructions but family pension and death gratuity has not been determined so far may also be decided in accordance with these instructions,” the O.M. said.

“Necessary amendment in the CCS (Pension) Rules, 1972 shall be made separately,” it added.