Gratuity: Government makes a major decision on gratuity; these people will get double benefits! Big update has arrived..

For central government employees, gratuity is not just a word, but a guarantee of financial security after retirement. But what if you have worked in two different government organizations during your career? Will you receive gratuity twice, or will the government deduct the amount from your second term? To resolve this confusion, the Department of Pension and Pensioners' Welfare of the Central Government has issued a crucial clarification. This new order, issued for employees covered under the National Pension System (NPS), clarifies when your gratuity will be subject to a 'limit' and when you will receive the full benefit.

What happens upon re-employment?
The government has based its memorandum on Rule 4A of the ‘CCS (Payment of Gratuity under NPS) Amendment Rules, 2025’. In simple terms, this rule prevents 'double benefits'. The department has clarified that if a government employee retires and has already received their gratuity, they will not be given a separate gratuity for their second term if they rejoin government service (re-employment). That is, after receiving retirement gratuity from the government exchequer once, a claim for gratuity cannot be made again upon re-employment within the same system.

If you have come from a PSU or State Government, understand this calculation
The rules are slightly different for employees who have joined the central government service after obtaining due permission from a PSU or autonomous body. The news is somewhat reassuring for such employees, but with a condition.

If you have come from a PSU, you are entitled to retain the gratuity from there and will also receive gratuity for your service with the central government. However, the government has imposed a 'ceiling' (limit) here. According to the rule, the total amount of gratuity received from both places cannot exceed the amount that the employee would have received if they had completed their entire service (PSU + Central Government) continuously with the central government. This formula will also apply to those who have left state government jobs to join the central government. In total, money will come from two sources, but the overall limit will be determined based on your final salary and total length of service.

Good news for soldiers: No limit will apply!
The biggest relief in this entire matter is for our ex-servicemen. The government had been receiving many questions about what would happen to those who joined the civil service after military service. After consulting with the Department of Expenditure, the government has clarified that this "gratuity limit" rule will not apply to ex-servicemen.

This means that if someone has served in the army and received gratuity from there, they will receive the full gratuity from their civil service job after joining it. Not a single rupee will be deducted from their civil service gratuity because of the gratuity received from the military.

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