8th Pay Commission to Bring Big Changes in Allowances and Health Benefits for Central Employees

Central government employees and pensioners are once again brimming with hope as the 8th Pay Commission gears up to introduce major reforms in salaries, allowances, and medical benefits. With the official formation of the commission confirmed earlier this year in January 2025, several new updates are now making headlines — especially regarding healthcare coverage under government schemes.

Here’s everything you need to know about what the 8th Pay Commission is expected to deliver, including updates on CGHS and the proposed Central Government Employees and Pensioners Health Insurance Scheme (CGEHPIS).

What Is the 8th Pay Commission?

The 8th Central Pay Commission is a government-appointed body that reviews and recommends revisions in the salary structure, allowances, and facilities for central government employees and pensioners. Unlike the common perception that it only determines salary hikes, the commission also looks at critical aspects such as medical benefits, retirement benefits, and quality of life improvements.

The previous 7th Pay Commission brought substantial changes in pay matrices, travel allowances, and health entitlements. The 8th Pay Commission is now expected to push those reforms further, keeping in mind current economic conditions and inflation trends.

CGHS: What It Is and Why It Matters

The Central Government Health Scheme (CGHS) is a flagship initiative by the Government of India designed to offer affordable and accessible healthcare to serving and retired central government employees and their families.

Services under CGHS include:

• Outpatient consultations

• Hospitalization in empaneled hospitals

• Free medicines

• Diagnostic tests and imaging

• Specialist referrals

While CGHS has been instrumental in supporting urban employees, one major concern remains: its limited availability in rural areas. Many pensioners and employees in remote regions are currently unable to access these benefits, creating a gap in the system.

As per the latest updates, the government is planning to expand the CGHS network and improve accessibility across India. This could include digital platforms, more CGHS wellness centers, and tie-ups with regional healthcare providers.

What’s New: CGEPHIS in the Pipeline

One of the most promising developments under the 8th Pay Commission is the proposal to implement the Central Government Employees and Pensioners Health Insurance Scheme (CGEHPIS).

This new health insurance model is designed to complement CGHS by offering wider coverage — particularly in non-CGHS cities and rural locations. It would provide cashless medical treatment at both public and private hospitals across India, helping bridge the urban-rural gap.

The introduction of CGEPHIS would ensure that even those residing outside CGHS-covered areas can receive quality healthcare services without bearing the financial burden upfront.

Allowances Set for Revision

In addition to healthcare, the 8th Pay Commission is expected to recommend changes in various allowances, including:

• House Rent Allowance (HRA)

• Travel Allowance (TA)

• Children’s Education Allowance

• Dearness Allowance (DA), possibly linked more closely with inflation metrics

The commission is also expected to assess remote area compensations, a particularly relevant issue for government employees working in difficult or rural locations.

Conclusion: A New Chapter for Central Employees

With the 8th Pay Commission now actively working on its proposals, major changes in financial and healthcare benefits are on the horizon. For the over 1 crore employees and pensioners relying on government support, this marks an important step toward improving living standards and ensuring robust healthcare access.

While the commission’s full recommendations are still pending, early indications suggest a progressive and inclusive reform package. Central government employees should stay updated and be ready to take full advantage of these upcoming benefits — especially in the areas of health insurance and revised allowances.