These government employees will not get gratuity of Rs 25 lakh, know the rules of UPS

UPS Pension Scheme: Last year, the Department of Pension and Pensioners’ Welfare (DoPPW) had raised the maximum limit of gratuity for central government employees by 25 per cent to Rs 25 lakh. This change became effective from January 1, 2024, when the dearness allowance (DA) reached 50 per cent. However, it is not necessary that every government employee gets this entire amount.

How is gratuity calculated?

Gratuity is calculated based on a specific formula. As per the rule, an employee gets 16.5 times his last salary (basic pay + dearness allowance) or Rs 25 lakh, whichever is less, as gratuity.This means that every employee will not get Rs 25 lakh, but the gratuity will be decided on the basis of their service period and salary.

Types of Gratuity

Government employees get two types of gratuity – retirement gratuity and death gratuity.

Retirement Gratuity

For every 6 months of service, one-fourth of the basic pay + dearness allowance is added.

Maximum 16.5 times the salary or Rs 25 lakh, whichever is less, will be given.

Minimum 5 years of service is mandatory to get gratuity.

Death Gratuity

If an employee dies during service, his family will get gratuity as per this formula-

Less than 1 year of service: 2 times the salary

1 to 5 years: 6 times the salary

5 to 11 years: 12 times the salary

11 to 20 years: 20 times the salary

Above 20 years: Half pay every 6 months

Will gratuity be paid under Unified Pension Scheme (UPS)?

The central government is going to launch a new pension scheme, ‘Unified Pension Scheme (UPS)’ from April 1, 2025. This scheme combines the features of Old Pension Scheme (OPS) and National Pension System (NPS). Under the scheme, employees with a minimum of 10 years of service will be guaranteed a minimum pension of Rs 10,000 and those who complete the full service period will be guaranteed a fixed pension.

Finance Ministry replied

Recently, the government was asked in the Parliament whether gratuity will be given under the Unified Pension Scheme (UPS), as is given in the Old Pension Scheme (OPS) and New Pension Scheme (NPS). The finance ministry responded that UPS is an option under NPS, and “gratuity will be paid as per the Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021.”