Sunday 13 December 2015

7th CPC Report on Fixed Medical Allowance

7th Pay Commission report on Fixed Medical Allowance

Fixed Medical Allowance

It is granted to pensioners for meeting expenditure on day to day medical expenses that do not require hospitalization, presently payable at the rate of ₹500 pm. Demands have been received to increase the rate of this allowance to ₹2,000 pm.

Pensioners are not covered under the CS (MA) Rules. Pensioners residing outside CGHS areas are entitled to Fixed Medical Allowance (FMA) @ ₹500 per month for their OPD/IPD needs. Such pensioners can also avail IPD/OPD under CGHS subject to some conditions.

Analysis and Recommendations : The Commission notes that this allowance was enhanced from ₹300 pm to ₹500 pm from 19.11.2014.

As such, further enhancement of this allowance is not recommended.

The Commission has received representations seeking enhancement in Fixed Medical Allowance, currently payable at the rate of ₹500 per month for pensioners not covered under Central Government Health Service (CGHS).

Authority: 7th CPC Report

7th Pay Commission Report on Enhancement of ceiling of Earned Leave for purposes of Leave Encashment

7th Pay Commission Report on Leave Encashment of EL

Enhancement of ceiling of Earned Leave for purposes of Leave Encashment

The Commission has received representations seeking raising the ceiling limit of 300 days to 450 days for purposes of Leave encashment.


Analysis and Recommendations : The Commission notes that based on the recommendations of the VI CPC, serving employees are entitled for encashment of Earned Leave up to 60 days while in service. This is not to be deducted from the maximum number of Earned Leave of 300 days encashable at the time of retirement. The VI CPC, therefore, has further liberalised the regime of leave encashment.

The recommendations in relation to pay of both the civilian and defence forces personnel will also lead to a significant increase in the pay drawn and therefore in the total amount of leave encashment available for an employee.

Therefore raising the present ceiling of 300 days is not recommended by the Commission.

Authority: 7th CPC Report

Analysis and Recommendations of Reduction in the time period for Restoration of Basic Pension

Reduction in the time period for Restoration of Basic Pension

The Commission has received a number of representations requesting reduction of restoration period of commuted portion of pension from the existing 15 years.

Analysis and Recommendations : The Commission notes that prior to V CPC the commutation allowed was one-third. However, there was no restoration. The Supreme Court, vide their judgement dated 09.12.1986, allowed restoration of pension after 15 years. The Supreme Court in its judgement specifically stated that though the amount is recovered in 12 years, yet since there is a risk factor and some of the states are restoring pension after 15 years, the period of restoration is fixed at 15 years. The V CPC in its recommendation increased the percentage of commutation to 40 percent and recommended restoration period at 12 years. But the reduction of restoration period was not accepted by the government. The VI CPC did not recommend any change in the maximum percentage of commutation allowed or in the period of restoration.

This Commission also does not recommend any change either in the maximum percentage of commutation or in the period of restoration.

Authority: 7th CPC Report

7th Pay Commission Report - Rationalisation of Death Gratuity

Rationalisation of Death Gratuity by 7th Pay Commission

The Commission has received representations pointing to a need for rationalization of current slabs for death gratuity, especially for the slab of 5 to 20 years of qualifying service in which family pensioners are stated to be placed at a disadvantageous position.

Analysis and Recommendations : As per Rule 50 of Pension Rules, the death gratuity admissible will be as follows, subject to the maximum limit prescribed for the gratuity:


Authority: 7th CPC Report

7th Pay Commission recommends enhancement in the ceiling of gratuity from the existing ₹10 lakh to ₹20 lakh from 01.01.2016

7th CPC increased Gratuity Ceiling limit – 20 lakh from 1.1.2016

Enhancement in the Gratuity Ceiling and its Indexation

The Commission recommends enhancement in the ceiling of gratuity from the existing ₹10 lakh to ₹20 lakh from 01.01.2016.

A number of representations have been received by the Commission stating that there is a need to revise the existing ceiling of ₹10.00 lakh with regard to payment of service gratuity.

Analysis and Recommendations : Rule 49 and 50 of the CCS (Pension) Rules provides that a government servant is entitled to get retirement gratuity equal to one-fourth of his emoluments for each completed six monthly period of qualifying service subject to a maximum of 16.5 times of the last emoluments subject to a maximum of ₹10 lakh.

The Commission sought the views of the government in this regard. The Department of Pension and Pensioners Welfare stated that the VI CPC has increased the amount of gratuity from ₹3.5 lakh to ₹10 lakh w.e.f. 01.01.2006. This amount, in the view of the department, is not commensurate with emoluments that are available to senior officers at the time of retirement. The department has suggested to the Commission that a view could be taken to index gratuity with amount of DA admissible at the time of retirement.

The Commission notes that there is merit in the argument advanced to index the ceiling on gratuity so that the benefits of the enhanced ceiling are available to personnel in a manner which is more even over a time frame.

The Commission recommends enhancement in the ceiling of gratuity from the existing ₹10 lakh to ₹20 lakh from 01.01.2016. The Commission further recommends, as has been done in the case of allowances that are partially indexed to Dearness Allowance, the ceiling on gratuity may increase by 25 percent whenever DA rises by 50 percent.

Authority: 7th CPC Report

7th Pay Commission Recommendations on Health Insurance Scheme

7th Pay Commission Recommendations on Health Insurance Scheme

Health Insurance Scheme : In this backdrop, the Commission opines that health insurance for the government employees and pensioners remains the most optimal route for ensuring complete coverage for all employees, pensioners and their dependants in the long run. The IV CPC had suggested that feasibility and modalities of an Insurance Scheme for government employees in lieu of medical reimbursement may be considered by the government.

The VI CPC had recommended introduction of a health insurance scheme for Central Government employees and pensioners. It had recommended that for existing employees and pensioners, the scheme should be available on a voluntary basis, subject to their paying the prescribed contribution. It had also been recommended that the health insurance scheme should be compulsory for new government employees who would be joining service after the introduction of the Scheme.

Similarly, it had recommended that those retiring after the introduction of the insurance scheme would be covered under the Scheme.

The Commission observes that in view of the recommendations of the earlier Pay Commissions and various high power committees, the government has been contemplating the introduction of a health insurance scheme on Pan-India basis. The Commission notes that although the Committee of Secretaries had given its ‘in principle’ approval way back in 2011, and an amount of ₹ 2,061 crore had been earmarked under the XII Five Year Plan, the Scheme has still not been implemented.

The Commission notes that given the tardiness in the introduction of the long awaited Insurance Scheme, as already mentioned earlier in this chapter, the pensioners residing outside CGHS area will continue to be at a disadvantage, in terms of medical facilities, compared to their counterparts residing in CGHS areas. As stated earlier in this chapter, according to existing provisions, pensioner residing outside CGHS area but subscribing to CGHS for OPD/IPD can avail medical facility from any hospital–private or public or empanelled under CS (MA)/ECHS–in his/her own city. However, in such cases, the pensioners have to make upfront payment to the hospital and claim reimbursement later. The Commission feels that this could be a limiting factor for many pensioners who may not have the resources to pay hospital expenses upfront. The Commission notes that under CS (MA) Rules/ECHS, there are empanelled hospitals in every part of the country, at least in all major locations. In this backdrop, after identification of some major centres/cities based on minimum population threshold of pensioners, these hospitals could be empanelled by CGHS as well, for extending
medical facilities on a cashless basis.

Considering all the issues, the Commission makes the following recommendations:

i. The Commission strongly recommends the introduction of health insurance scheme for Central Government employees and pensioners. In the interregnum, for the benefit of pensioners residing outside the CGHS areas, the Commission recommends that CGHS should empanel those hospitals which are already empanelled under CS (MA)/ECHS for catering to the medical requirement of these pensioners on a cashless basis. This would involve strengthening of administrative capacity of nearest CGHS centres. However, this step will go a long way in ameliorating the pending grievances of these pensioners.

ii. The Commission recommends that the remaining 33 postal dispensaries should be merged with CGHS. The Commission further recommends that all postal pensioners, irrespective of their participation in CGHS while in service, should be covered under CGHS after making requisite subscription.

iii. Currently, there are various health care schemes in the Central Government catering to specific sets of employees. For example, apart from CGHS, there are Ex-Servicemen Contributory Health Scheme (ECHS) and Railways Employees Liberalized Health Scheme (RELHS) which cover ex servicemen and Railway employees/pensioners, respectively. Although the patterns in these schemes vary, a combined entity of CGHS ECHS-RELHS
would result in a very strong network of health facilities for the Central Government employees across the length and breadth of the country. The Commission recommends that possibility of such a combined network of various medical schemes should be explored through proper examination.

Based on the recommendations of the VI CPC, the Government has been contemplating introduction of a Health Insurance Scheme. The Commission observes that there are many global health care insurance companies today who provide comprehensive health care coverage. Through suitable tie ups with these companies, the government may examine the possibility of enhancing the remit of the proposed Health Insurance Scheme to include all the officers/staff and their dependents posted in Embassies/Missions abroad. Needless to state, this should be preceded by a thorough examination of the annual costs involved under the AMA Scheme vis-à-vis likely annual cost under the insurance route.

Authority: 7th CPC Report

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