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DA Hike: The Central Government’s ‘Department of Pension and Pensioners Welfare’ has issued an official order on May 22. The central government has done a lot of relief work from this order. Considered as important news for senior retired employees and their families. The government has decided to increase Dearness Relief – DR for this group. This decision applies to retired employees and their eligible family members who still fall under the ambit of the ‘5th Central Pay Commission’. These new anti-inflation rates will be effective from July 1, 2025 and January 1, 2026.

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Who will benefit?

This revised ‘Dflation Relief (DR) will be available only to a limited category of retired CPF beneficiaries and their eligible families. The first category includes surviving CPF beneficiaries who retired between 18 November 1960 and 31 December 1985 and who are currently receiving the original ex-gratia payment. For these persons, the new rates of DR will be as follows:

474% applicable from 1 July 2025
483% applicable from 1st January 2026
In the second category, widows and eligible dependent children of deceased CPF beneficiaries; Also includes employees who retired before 18th November, 1960 and are currently receiving ex-gratia amount. For this group, the new rates of DR will be as follows:

466% applicable from 1 July 2025
475% applicable from 1st January 2026
As these rates will be applicable with retrospective effect (from July 2025 and January 2025), eligible beneficiaries will also be fully paid the previous months dues.

These things will be considered while making the calculation

The government has made it clear that while calculating DR, if any amount is answered in fractions i.e. money, then the amount will be rounded off to the “next whole rupee” as per the rules. For example, if the amount after calculation is 200.15, it will be treated as 201. The government has further stated that, in each case, the onus will be on the pension disbursing institutions and government banks to ensure that the calculation of DR is accurate.

It is important to mention here that this increase in DR is applicable only to the select group of senior citizens who are receiving ex-gratia amount under the old CPF scheme. In contrast, for regular Central Government employees and pensioners covered by the 7th Pay Commission, their Dearness Allowance DA and Dearness Relief (DR) are currently fixed at 60% (with effect from 1 January 2026).

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