8th Pay Commission Gratuity Limit: Ahead of the 8th Pay Commission, many employee groups are asking for better gratuity payments. Right now, the central government rule gives gratuity after 5 years of qualifying service. It is calculated at 1/4th of Basic Pay plus Dearness Allowance (DA) for every completed six-month period. The rule also keeps the total at 16.5 times emoluments. Official government pages say the retirement gratuity ceiling is Rs 20 lakh, and the government also says employees who choose UPS can still get retirement gratuity and death gratuity under the CCS gratuity rules.
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If a government employee dies while in service, the family can get death gratuity too. The official table says the amount is 2 times basic pay for less than one year of service, 6 times for one year to less than 5 years, 12 times for 5 years to less than 11 years, 20 times for 11 years to less than 20 years, and after 20 years it becomes half of emoluments for every completed six-month period, with a maximum of 33 times emoluments. The maximum death gratuity on the Pensioners’ Portal is also listed as Rs 20 lakh.
What IRTSA wants changed
The Indian Railways Technical Supervisors’ Association wants a much bigger ceiling. It has asked that the maximum gratuity limit be raised to Rs 50 lakh. It also wants the formula changed. The exact line in its memorandum is: “Retirement gratuity should be calculated @ 1/3rd of a month’s BP + DA drawn on the date of retirement for each completed six-month period of qualifying service. The retirement gratuity payable for qualifying service of 33 years or more should be 32 times of BP + DA, subject to a maximum of ₹50 lakhs.”
IRTSA has also asked for a new death gratuity structure. Under its proposal:
- Less than 1 year of service: Family should receive 4 times the employee’s basic pay as death gratuity.
- 1 year or more but less than 5 years of service: Family should receive 12 times the basic pay.
- 5 years or more but less than 11 years of service: Family should receive 24 times the basic pay.
- 11 years or more but less than 20 years of service: Family should receive 30 times the basic pay.
- 20 years or more of service: Family should receive half of the employee’s emoluments for every completed six-month period of qualifying service, subject to a maximum limit of 50 times the emoluments.
Overall proposal The maximum death gratuity amount should be capped at ₹50 lakh.
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What RSCWS and NC-JCM are asking for
The Railway Senior Citizens Welfare Society wants the gratuity ceiling to be checked often, so it does not fall behind rising prices. It said, “The ceiling of gratuity should be reviewed periodically in line with the rising cost of living. The payment of gratuity must be ensured promptly at the time of retirement without procedural delays,”. It also said, “In addition, the gratuity provisions under different pension systems such as the Old Pension Scheme (OPS), New Pension Scheme (NPS), and Unified Pension Scheme (UPS) should be rationalised to maintain parity and fairness,”.
The NC-JCM Staff Side has gone further. It wants the gratuity cap lifted to Rs 75 lakh. It also wants the formula changed so gratuity is based on 25 effective working days instead of 30 days in a month. Its exact words are: “We propose that Gratuity should be calculated based on 25 effective working days instead of 30 days in a month, so that Government Employees are not placed at a disadvantage compared to employees covered under the Payment of Gratuity Act,”.
It also said, “Further, the existing ceiling of 16.5 times the emoluments should be removed. This effectively reduces Gratuity for employees who have served beyond 33 years.” The same memorandum says the revised benefits should also cover employees under NPS and UPS.
