Key Clarifications on Gratuity Payment Rules for Central Government Staff
The Indian government has issued definitive guidelines clarifying the conditions under which central government employees enrolled in the National Pension System (NPS) are eligible for retirement and death gratuity benefits. These rules, outlined in the Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021, address ambiguities raised by employees and RTI applicants seeking clarity on service tenure requirements and benefit calculations. The Department of Pension & Pensioners’ Welfare (DoP&PW) emphasized that gratuity payments depend on specific criteria, including the nature of service termination and the employee’s length of service. The clarification aims to resolve disputes over whether resigning employees retain their entitlements under the NPS framework.
Retirement Gratuity Calculation and Service Requirements
Retirement gratuity is a financial benefit provided to government servants retiring after completing a minimum of five years of qualifying service. The amount is calculated as one-fourth of the employee’s basic pay plus dearness allowance (DA) for each completed six-month period of service. For employees with over 33 years of service, the gratuity cap is set at 16.5 times their basic pay plus DA, with a maximum limit of Rs 25 lakh. The rules specify that gratuity is only payable upon retirement, not for voluntary resignation unless specific exceptions apply. Employees who resign without meeting these conditions forfeit their service tenure for gratuity purposes, as per Rule 17 of the NPS regulations.
Death Gratuity and Service Tenure Exceptions
Death gratuity is a one-time lump sum payment provided to the nominee or family of a deceased government servant who died while in service. Unlike retirement gratuity, there is no minimum service requirement for death benefits. The payout is determined by the employee’s length of service: for less than one year, it is 2 times the salary; for 1-5 years, 6 times the salary; and so on, with higher multiples for longer service periods. The rules also clarify that employees absorbed into government-controlled entities or corporations are deemed to have retired, allowing them to claim gratuity based on their qualifying service duration. This provision is outlined in Rule 32, which protects service tenure for those transitioning to affiliated organizations.
Exceptions for Resigning Employees and Service Protection
Rule 17 of the NPS guidelines states that resigning employees forfeit their past service for gratuity and pension calculations. However, exceptions exist for those resigning to take up another government job or to join a government-controlled body. In such cases, the service tenure remains protected, ensuring eligibility for retirement benefits. For example, employees transitioning to a corporation or company owned by the central or state government are treated as retired from their previous service, allowing them to claim gratuity based on their qualifying service period. This provision ensures continuity of benefits for employees moving between government-linked entities.
Impact of Rule 22 on Gratuity Eligibility
Rule 22 of the Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021, serves as the cornerstone for determining eligibility for both retirement and death gratuity. It explicitly defines that only employees retiring or retiring early under specified conditions, such as through the Special Voluntary Retirement Scheme or absorption into government-owned entities, qualify for gratuity. The rule also emphasizes that gratuity is not payable for voluntary resignations unless the employee meets the criteria outlined in Rule 32. This clarification ensures that only those who meet the defined service tenure and retirement conditions are eligible for gratuity payments, preventing misuse of the system.
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