After decades of judicial pronouncements, disability benefits finally made admissible by the Government to pre-2006 voluntary retirees with effect from 01 January 2006

The Government has finally given effect to judicial pronouncements whereby cases of premature retirement and personnel ‘discharged at own request’ were held eligible to disability and war injury benefits.

Earlier, as per regulations, disabled and war injured retirees were not allowed disability and war injury benefits if they had sought retirement on their own volition. This practice was held to be illegal by the Delhi and the Punjab & Haryana High Courts. Later when a Government letter was issued by the Ministry of Defence entitling such personnel to benefits, it was made applicable only to those who had retired after 01-01-2006. This cut-off date was also held illegal by the Armed Forces Tribunal later. The Punjab & Haryana High Court had also endorsed the action of the Tribunal. Later, the Chandigarh Bench of the Tribunal had taken the official establishment to task for not giving effect to judicial dicta.

A Committee of Experts constituted by the then Raksha Mantri, Mr Manohar Parrikar, had also strongly recommended the resolution of the issue and the recommendation on the said point was accepted by the Minister.

The letter resolving the matter has finally been issued by the Ministry of Defence and can be downloaded and accessed by clicking here.

The benefits have been made applicable with financial effect from 01 January 2006 and to all cases where the disability was declared attributable to, or aggravated by military service.

This settles one of the most important issues concerning our disabled veterans.

There is however one problem still existing in the dispensation wherein the letter again only talks about ‘disability element’ and not ‘disability pension’ which consists of both elements, that is, service element as well as disability element. 

Orders for “Notional Pension Fixation Formula” under the 7th Pay Commission regime, as approved by the Cabinet, issued

As all are aware, the 7th Central Pay Commission (CPC) had recommended two formulae for calculation of pension of pre-2016 retirees. While the first formula involved calculation of pension based on a notional basis, the second involved the multiplication of old 6th CPC pension X 2.57. The orders for the second formula were issued earlier and the first formula was recently accepted with certain modifications by the Cabinet.

The Government of India has today issued orders for calculating pension based on the first formula for civil pensioners who retired prior to 2016 and similar orders for defence pensioners shall be issued separately since military pensions involve certain additional complexities as compared to civilians. Pensioners shall be entitled to receive the higher pension out of the two formulae.

The revision shall be undertaken by notionally fixing the pay in the pay matrix recommended by the 7th CPC in the level corresponding to the pay in the pay scale/pay band and grade pay at which such pensioners had retired (for pension) or died (for family pension). This will be done by notional pay fixation under each intervening Pay Commission based on the Formula for revision of pay.

The pension under the new dispensation shall also be allowed from 01-01-2016.

The new orders can be accessed and downloaded by clicking here.

Again, please DO NOT mail me individual queries on email or social media. You are free to discuss the above @ the comments section of this post.

Thank You.

Clarifications and update on the Cabinet decisions on pay and pensionary issues emanating out of the 7th Central Pay Commission

There is a press note floating around on social media regarding certain decisions taken by the Cabinet related to pay and pensionary modalities related to the 7th Central Pay Commission (CPC). Though many have questioned its veracity, this is to confirm that it is absolutely a valid document and has been officially issued by the Ministry of Finance.

That said, let me run through some of the important decisions taken by the Cabinet, clarifications thereon and their impact. Please note that the new Pay Rules issued by the Ministry of Defence do not take into account the changes in the pay structure or removal of anomalies and these shall be incorporated through separate amendments in the rules issued on 03 May 2017.

Restoration of Percentage based Disability Pension Rates

The 7^th CPC had recommended ‘flat/slab’ rates of disability pension for the defence services rather than the ones based upon ‘percentage of pay’. Civil disabled personnel were however retained on the percentage system as before. As stated earlier, frankly, I never expected this regressive 7^th CPC recommendation to be accepted by the Government, but unfortunately it was. While recommending this aspect, the 7th CPC had also made unfounded and uncharitable remarks against disabled soldiers by casting aspersions on those who have incurred disabilities while in service which was discussed in detail by me earlier in my opeds, here and here. This resulted in a massive decrease after the 7^th CPC resulting in a payout even lower than 6th CPC rates for almost all post-2016 retirees of all ranks and also for pre-2016 retirees of certain ranks. The arbitrariness of this decision becomes evident from the following chart at the apex levels:

(100% Disability) Rank	Rates under the 6th CPC as on 31 Dec 2015	Rates applicable after the 7th CPC as on 01 Jan 2016
Lt Gen	Rs 52,560	Rs 27,000
Head of Central Armed Police Force	Rs 52,560	Rs 67,500

This issue was much close to my heart. Thankfully, the then Defence Minister, Mr Manohar Parrikar, fully understood the consequences and took personal interest in getting the matter referred to an Anomaly Committee. The Defence Services HQ as well as the Ministry, and even civilian employee organisations, supported the resolution of this anomaly which now stands addressed and the Cabinet has decided to retain the old system of calculation on percentage basis, that is, 30% of pay shall remain the disability element for 100% disability. I however do hope that a protection clause is introduced for pre-2016 retirees of lower ranks who stood to gain from the slab rates.

Improvement in Pension calculation system for pre-2016 civil and defence retirees

The Cabinet has also accepted an improvement over and above the system of pension calculation which was finally effectuated after the 7^th CPC. Rather than basing the pensionary calculations on the “Old Pension X 2.57” formula, an option would be provided to calculate the pension based upon the notional pay stage from which the employee had retired as opposed to the minimum of pay as was the system followed till the 6^th CPC. Calculation of pension in this manner would definitely enhance the pension of civil pensioners and perhaps a small number of defence pensioners, who, in all probability would be provided the opportunity of choosing the most beneficial option, that is, the new formula, 2.57 multiplication formula or OROP rates. Contrary to popular perception, this does not exactly result in OROP for pre-2016 civil employees as is being projected, since while this is based on notional data, the military OROP is operated on live date of fresh retirees, moreover while this system is expected to be revised only after ten years, the military OROP as per the current scheme is meant to be revised after every five years.

Issuance of Pay Rules rather than Instructions on Pay

There were messages in circulation that the Chiefs of the Defence Services have been sidelined and downgraded since the earlier system of issuance of Special Army Instructions, Special Navy Instructions and Special Air Force Instructions (SAI/SNI/SAFI) has been discontinued and a new dispensation of ‘Pay Rules’ has been initiated. This seems to be an extreme case of over-interpretation and negative imagination of fertile minds. SAI/SNI/SAFI were never issued under the authority of the Chiefs or the Defence Services HQ but were always issued by the Ministry of Defence, that is, the Government of India. ‘Orders’ such as Army Orders (AO) etc were (and are) issued by the Defence Services HQ under the power of the Chiefs. The new Pay Rules have been promulgated under the authority of Article 309 of the Constitution of India and are statutory in character rather than being mere executive instructions like was the case till now. With this, the pay rules of the Defence Services are at par with the statutory pay rules of the civil services which are also issued under the authority of Article 309 of the Constitution of India.

Defence Pay Matrix to have 40 stages

The 7^th CPC had recommended only 24 stages in the defence matrix while 40 stages were provided to civilians. This anomaly has been rectified and now the defence pay matrix shall also have 40 stages. This will particularly be helpful for JCOs towards the retiring years and will also beneficially affect their pension and other retiral benefits.

Multiplication factor of 2.67

This anomaly had been rectified earlier for Brigadiers and a multiplication factor of 2.67 had been applied for the said rank. Now the benefit of multiplication for Index of Rationalization (operative at the beginning of the entry pay) has also been extended to Lieutenant Colonels, Directors to Government of India and Colonels, that is, Levels 12A and 13 of the Pay Matrix. Further, just to clarify, this multiplication factor has no link with pensions whatsoever. 

Other Anomalies

There shall be pay protection for the amount of Military Service Pay (MSP) on promotion from the rank of Brigadier to Major General. It may be recalled that MSP is not entitled to ranks above the rank of Brigadier. No decision has been taken by the Government on the aspect of Non Functional Upgradation till now since the matter is being considered sub judice. On directions of the Supreme Court, the Government is re-considering the issue of NFU for Central Armed Police Forces for which a meeting was recently held. The issue is to be considered by the Government and the fresh decision is to be placed before the Supreme Court in August 2017. The most pertinent anomaly of enhancement of Military Service Pay, especially for JCOs, also remains pending along with other matters and probably these issues would be clearer after various anomaly committees submit their reports and a decision is taken thereafter by the Cabinet. Non-inclusion of 'X Group Pay' for pension is also a cause of concern, it may be recalled that till now the same was included as an element for pension. The committee on allowances has already submitted its report which will now be examined by the Government. Unlike pay and pension which are admissible retrospectively from 01 January 2016, most freshly rationalized allowances shall only be admissible prospectively.

This is all I have to say at present, please DO NOT mail me individual queries on email or social media. You are free to discuss the above @ the comments section of this post.

Thank You.

Seventh Central Pay Commission orders for pay issued by Ministry of Defence

The Ministry of Defence has issued the orders for the new pay regime on implementation of the recommendations of the 7^th Central Pay Commission for all ranks.

The orders shall now be known as Rules rather than Instructions. For example, the modalities for Ranks other than Commissioned Officers of the Army shall be known as the “Army Pay Rules” rather than “Special Army Instructions”.

The orders for Ranks other than Commissioned Officers can be accessed and downloaded by clicking here.  

The orders for Commissioned Officers of the Army can be accessed and downloaded by clicking here.

The orders for Commissioned Officers of the Navy can be accessed and downloaded by clicking here.

The orders for Commissioned Officers of the Air Force can be accessed and downloaded by clicking here.