PTC Web Desk:  The Punjab Government has announced a major relief for state government employees who retired between January 1, 2020, and June 30, 2021. The state has decided to revise the calculation of gratuity and leave encashment by considering a higher notional Dearness Allowance (DA), a move that is expected to increase the retirement benefits of eligible employees.

The revised benefits will be paid within three months, according to the government notification.

Decision comes during High Court hearing

The development came to light during the hearing of two petitions before the Punjab and Haryana High Court. The petitions were filed by retired government employees seeking revision of their retirement benefits.

During the proceedings, the Punjab Government placed before the court a notification issued by the Finance Department on July 6, outlining the revised formula for calculating gratuity and leave encashment.

The High Court took the notification on record and the matter has now been listed for further hearing on July 14.

Why govt changed the formula

Earlier, gratuity and leave encashment for employees who retired during the specified period were calculated by taking 17 per cent Dearness Allowance into account. The government said these two benefits are one-time retirement payments and acknowledged that employees who retired during this period received lower amounts than they would have otherwise been entitled to. Keeping this in view, the state decided to revise the notional DA used for calculating these benefits.

Revised DA rates for calculation

The revised notional Dearness Allowance to be used for gratuity and leave encashment will be:

21% of basic pay for employees who retired between January 1, 2020, and June 30, 2020.

24% of basic pay for those who retired between July 1, 2020, and December 31, 2020.

28% of basic pay for employees who retired between January 1, 2021, and June 30, 2021.

These revised rates will be used only for calculating gratuity and leave encashment. All other pension-related rules and conditions under the Punjab Civil Services Rules will continue to apply.

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The Finance Department has directed all pension-sanctioning authorities to recalculate the eligible benefits and ensure payment to retired employees within three months from the date of the notification.

The government expects the revised calculation to provide additional financial relief to thousands of eligible retirees whose retirement benefits were affected during the 2020-2021 period.

The decision is significant because it corrects the calculation of two major one-time retirement benefits for eligible Punjab government employees. With the higher notional DA now being considered, many retirees are expected to receive additional gratuity and leave encashment amounts, offering much-needed financial support after retirement.

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