Fact Check: No Removal of DA Hikes or 8th Pay Commission Benefits for Central Government Pensioners

Recent reports circulating in some media outlets have caused concern among retired government employees, claiming that the Centre has decided to eliminate key post-retirement benefits, including a rise in the dearness allowance (DA). It also says that employees might be excluded from the benefits of the 8th Pay Commission. These reports suggest that such changes are part of the Finance Act 2025. However, a closer look at the facts reveals these claims to be untrue.

What is Behind the Confusion on the 8th Pay Commission and DA for Pensioners?  

The source of this confusion appears to be an amendment to Rule 37 of the Central Civil Services (Pension) Rules, 2021. Specifically, Rule 37(29C) has been updated. This amendment, introduced by the Department of Pension and Pensioners’ Welfare after consulting various other government departments, deals with a very specific scenario.

The amended rule states that if a Public Sector Undertaking (PSU) employee, who was previously absorbed from a government department, is dismissed or removed from service due to misconduct, their entire retirement benefits, including pension from their earlier government service, can be forfeited.  

This marks a notable shift from the previous rule, which protected pension benefits from prior government service even in such cases. The decision of the PSU in such instances will be subject to review by the administrative ministry concerned with the undertaking.

Debunking the False Claims 

It is crucial to understand that this specific amendment to Rule 37 has absolutely no connection to dearness allowance (DA) increases or the benefits from future pay commissions for the general body of retired government employees. The reports linking this amendment to the Finance Act 2025 and claiming the removal of DA hikes and Pay Commission benefits are therefore not true.

Furthermore, the government has not released any official notification or confirmation regarding such widespread changes to pension benefits.

Finance Minister's Clarification

A controversy surrounding a pension-related provision in the Finance Bill 2025 did arise earlier this year when it was passed in Parliament in March. Employee unions expressed concerns that the provision might harm retirees and create disparities between old and new pensioners.

However, Finance Minister Nirmala Sitharaman swiftly clarified the matter in Parliament. She assured that the provision merely reaffirmed existing regulations that have been in place since June 1, 1972, and did not alter civil or defence pensions in any way. The Department of Pension & Pensioners’ Welfare (DoP&PW) also confirmed that the pension parity established by the 7th Central Pay Commission (CPC) would remain unchanged.

Read more on: 8th Pay Commission Calculator: What ₹21,700 Basic Pay Looks Like with 1.92x, 2.0x, and 2.86x Fitment Factors. 

Conclusion 

In summary, the claims that retired government employees will no longer receive DA increases or benefits from future pay commissions are baseless. The only recent relevant rule change pertains to the forfeiture of retirement benefits for PSU employees absorbed from government service who are dismissed for misconduct.  
 
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