EPFO Suspends Gratuity Increase Of Govt Employees Amidst DA Increase

The Employees Provident Fund Organisation (EPFO) announced the temporary suspension of gratuity hike on account of an increase in their dearness allowance (DA). An EPFO circular signed by SK Suman, additional Central PF commissioner, and issued on May 7, 2024, said, "The circular number HRD-1/8/2024/Misc-Circulars-Part(1)/1004 dated 30.4.2024 is kept in abeyance with immediate effect”. The move earlier announced on increase in gratuity amount corollary to DA hike, based on the recommendations of the seventh Central Pay Commission, is expected to benefit around 4.9 million government employees and 6.79 million pensioners, amounting to a total expense of around Rs 12,868.72 crore to the exchequer.

Recently the Central Government raised the DA and dearness relief of government employees by 4 per cent, bringing it up from 46 per cent to 50 per cent. This led to a huge revision in various other allowances tied to the DA, including the gratuity mount and gratuity ceiling.

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With the DA reaching the 50 per cent threshold, the ceiling for gratuity was automatically raised from Rs 20 lakh (16½ times the Basic Pay plus DA) to Rs 25 lakh, applicable for all employees having service of 33 years or more.

Apart from the hike in gratuity, several allowances like House Rent Allowance (HRA), Children's Education Allowance (CEA), Hostel Subsidy, and Special Allowance for Childcare also saw hikes. HRA has been increased for central government employees living in cities falling under as X, Y, and Z categories.

As of now, the government employees will receive a fixed monthly reimbursement of Rs 2812.5 for Children's Education Allowance and Rs 8437.5 for Hostel Subsidy. Children with disabilities (Divyang children), previously entitled to a fixed sum of Rs. 5,625 per month, will be doubled, regardless of their actual expenses. The Special Allowance for Child Care for women with disabilities has been revised to Rs. 3750 per month, with accompanying conditions.

EPFO had earlier on May 3 issued a circular introducing a new email address for NPS-related inquiries: epfohq.nps@epfindia.gov.in. All NPS-related queries directed to the head office are arranged to be routed to this email ID.

Also, any pending inquiries previously submitted should now be redirected to this new email address.