DoPPW revises Gratuity rules: How will salary hike in last 10 months affect payments?

In the revised rules, the DoPPW has introduced some new provisions for the calculation of average salary/emoluments in the last 10 months.

While gratuity calculation typically takes into account the last drawn salary or emoluments, there are circumstances in which the last 10 months ' average salary is used for gratuity calculation. These circumstances may include one of the following:

• Salary decreased in the last 10 months of service for any reason, excluding a penalty, such as a leave or suspension (but reinstated later without forfeiture of service).

• Salary increased in the last 10 months of service, maybe because of a promotion.

While the previous rule - Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021 - addressed the first situation, it didn't provide for cases where last 10 months' salary may have increased, or where the employee's salary is reduced on account of leave due to medical reasons or when an employee dies when a penalty is in effect.

The following key changes have been introduced by the new rule for calculation of average emoluments:

It said, "Where during the last ten months of his service, a Government servant had been absent from duty on extraordinary leave, or had been under suspension the period whereof does not count as service, the aforesaid period of leave or suspension shall be disregarded in the calculation of the average emoluments and equal period before the ten months shall be included and in order that the fractions of a month, when added, worked out to one full month, a month for this purpose shall be reckoned as consisting of thirty days."

The new rule has added the following illustration to make the above rule clear:

Apart from the above, the following new rules have been inserted in the section on calculation of average salary:

A. Where the pay of a Government servant is notionally increased with retrospective effect during the last ten months of his service in any of the following circumstances after his retirement, such notional pay shall be taken into account for determining the average emoluments for this rule:

(i) the pay scale of the post from which the Government servant retired is increased with retrospective affect from a date when the retired Government servant was in service and his pay in the higher pay scale is fixed from such date on notional basis;

(ii) the retired Government servant is promoted from a retrospective date on the recommendation of a review Departmental Promotion Committee or on exoneration in any departmental proceedings or in compliance of a court order and the benefit of fixation of pay is allowed to the retired Government servant on notional basis from the date of such promotion.

B. Where a Government servant dies during the currency of a penalty which has the effect of reducing his pay only during the currency of that penalty and on expiry of which he would have regained the pay admissible to him without any impact of the said penalty, the notional pay during the last ten months of his service ignoring the effect of such penalty shall be taken into account for determining the average emoluments.