Introduction

1. Pension is a retirement benefit for government employees governed by a Pension scheme where in a recurring monthly payment for life and a lump sum gratuity is given at the time of retirement. The quantum of Pension and Gratuity is determined with reference to the length of service and last pay drawn. Pension has great significance since it is a measure of socio-economic justice and brings economic security in the fall of life when physical and mental prowess tends to ebb.

2. Judicially, Pension is defined as a stated allowance or stipend made in consideration of past service. In the event of death, spouse of pensioner gets a monthly payment for life whereas other beneficiaries get such payment for limited period or for life subject to certain conditions.

3. The constitution and law of our country have recognised pension as a property and provides protection to it. The Courts will not allow refusal, reduction, forfeiture of pension unless there are genuine grounds for doing so and the employees can also seek redress in the Courts of Law, whenever, they feel that justice has been denied to them. Only misconduct of the gravest nature can lead to forfeiture of pension once sanctioned. Pension is also secure against attachment, seizure or sequestration by process of any civil court at the instance of a creditor or in satisfaction of a decree or order of any civil Court of Law. Amounts owed by the pensioner to Govt, though undisputed cannot be recovered by deduction from pension except with his express consent. However pension can be attached on orders of a criminal court for maintenance of wife under sec-125 of Cr PC.

Retiring Pension

4. Retiring/Service Pension. Retiring Pension is granted to officers on completing a minimum qualifying service of 20 years (15 years in case of late entrant). Service Pension is admissible to JCOs/OR on completion of minimum mandatory qualifying service of 15 years. The linkage of full pension with 33 years of qualifying service and rank wise weightages admissible has been dispensed with effect from 01 Jan 2006.

5. Calculation of Pension. It is calculated @50% of the emoluments last drawn or average of last 10 months emoluments drawn, whichever is more beneficial, where : Reckonable Emoluments = Basic Pay + Grade Pay + MSP + NPA or Classification Allowance (For the purpose of gratuity, reckonable emoluments will be same as above but will include DA)

Commutation of Pension

6. A maximum of 50% of pension can be commuted. The commuted value of pension is calculated on the basis of the personnel’s age on next birthday, following the date of retirement. Formula for calculation of capitalized value of pension = 50% of Service/Retiring Pension x 12 x Commutation Value. Communication table effective from 1-9-2008 is given below:-

Example : Pension (Col) : Rs 25900/-
Amount commuted (50%) : Rs 12950/-
Age Next birth day at the time of retirement : 57 Years
Commutation Value : 8.512
Commutation amount = 12950 x 12 x 8.512 = Rs 13, 22,764/-

Gratuity

7. Gratuity means a onetime reward given by the employer for the past services rendered. All service which qualifies for pension of an officer shall also qualify for gratuity. The reckonable emoluments for gratuity are same as for pension. However, gratuity will additionally include DA also.

8. Retirement Gratuity. Officers and JCOs/OR who have put in qualifying service and are eligible for service pension/invalid gratuity or pension of any type are entitled for Retirement Gratuity. It is paid at the rate of one fourth of the emoluments last drawn for every six months of completed service, subject to a maximum of sixteen and half months pay, or Rs 10 lakhs whichever is less. No weightage in qualifying service is admissible for calculating Retiring Gratuity.

9. Retiring/Service Gratuity. Where service rendered is less than the minimum qualifying service to earn a pension, but is 5 years or more in case of JCOs/OR and 10 years or more in case of officers, Service/Retiring Gratuity is admissible at the rate of half a month’s reckonable emoluments for each completed six monthly period of qualifying service. No weightage in qualifying service is admissible for calculating Retiring Gratuity.

10. Invalid Gratuity. An individual invalidated out of service for causes which are neither attributable to nor aggravated (NANA) by service, is granted invalid pension, if he has rendered more than 10 years’ service. If the service rendered is less than 10 years at the time of invalidment, only invalid gratuity is paid. The amount of Invalid Gratuity shall be calculated at half a month’s Reckonable Emoluments , for each completed six monthly period of qualifying service. The maximum limit of Invalid Gratuity is Rs. 10 lac.

11. Death Gratuity. Admissible in case of death while in service, to the Next of Kin at the following rates:-

12. Terminal Gratuity. Terminal gratuity is paid to Short Service Commissioned Officers who are not entitled for any type of pension. The terminal gratuity is calculated at the rate of half-a-month’s reckonable emoluments for each completed six-monthly period of service.

Additional Pension to Old Pensioners

13. The quantum of pension available to the old pensioners/ pensioners shall be increased as under with effect from 01 Jan 06.

Note: The above increase is also applicable in respect of those in receipt of casualty awards. i.e. Disability Pension, War Injury Pension, Special Family Pension and Liberalised Family Pension.

14. Methodology to be adopted for Payment of Additional Pension on Attaining Age of 80 Years and Above in Cases Where the Date of Birth is Not Available in the PPO. Old pensioners of 80 years of age and above where exact date of birth nor the age is available either in the PPO or in the office records, can submit four copies of any of the following documents, duly attested by a Gazette Officer/MLA to the Pension Disbursing Agency for additional pension/family pension :-

(a) PAN Card.
(b) Matriculation Certificate (containing information regarding date of birth).
(c) Passport.
(d) ECHS Card.
(e) Driving License (If it contains date of birth).
(f) Election ID Card.

Auth: Govt of India letter No 1(11)/2009/D(Pen/Policy) dated 18 Aug 09.

Disability/ Invalid / War Injury Pension

Disability Pension

15. An officer can develop a disability while in service through an injury or disease. Depending upon the degree of disablement, he can be either retained in service or can be invalided out of service. Invalid medical board is done when an officer is permanently downgraded to the lowest medical category.

16. When an officer’s disability is attributable to or aggravated by military service and he has a disability of 20% or more, then he is entitled to disability pension. Disability pension is given for following reasons:

(a) For disability attributable to or aggravated only by the service.

(b) When the disability percentage as per medical board is 20% or more.

Components of Disability Pension

17. Disability pension has two components i.e., Service element and Disability element. For both these elements, separate PPOs are normally issued.

(a) Disability Element. Disability element is that part of the disability pension which is given for the disability which is attributable to or aggravated by service. Therefore disability element is directly linked with the disability percentage as decided by Release / Invalidment Medical Board (RMB/IMB). Disability percentage is the percentage of loss suffered w.r.t. 100% fitness of an officer. For 100% disability, 30% of last reckonable emoluments will be paid as disability element for the disability pension subject to a minimum of Rs 3510/-. For lesser disability, it will be reduced proportionately. Dearness Relief (DR) is payable on the service element as well as disability elements.

(b) Service Element. Service element is similar to retiring pension i.e. 50% of last reckonable emoluments.It consists of pension for service actually rendered i.e. 50% of last pay drawn subject to a minimum of Rs.3500/- pm.

Invalid Pension

18. Quite often there is confusion between disability pension and invalid pension. Both are not the same. There can be a situation where an individual is invalided out of service with a disability which is neither attributable to nor aggravated by service (NANA). In such a case if the individual has a qualifying service of 10 years or more, he will be granted service element of pension at 50% of last drawn pay or last 10 months average pay whichever is more beneficial. However he will not be entitled for disability element of pension. This type of service element of pension (for invalidated out officers) where his disability is NANA is called as Invalid pension. In cases of invalidment with disability as NANA, if the qualifying service is less than 10 years, the individual is entitled for invalid gratuity only (and not for invalid pension). Invalid gratuity is calculated @ half- a-months reckonable emoluments + DA for every six months of service subject to a maximum limit of Rs 10 Lac.

19. Thus an individual who is invalided out of service will be eligible for disability pension if his disability is attributable to or aggravated by service. In such a case he will be eligible for the service as well as the disability element of disability pension. However if the individual is invalided out of service with 10 years or more of qualifying service and his disability has been decided as NANA he will be entitled to Invalid pension only.

Beneficial Provisions of Disability Pension for Invalidment Cases.

20. An officer with a disability could be entitled for disability pension in three cases i.e. if invalided out of service or if proceeding on superannuation or proceeding on premature retirement. For cases of superannuation and premature retirement the disability pension will be fixed as per guidelines explained above. The Govt is also benevolent in deciding the disability pension for individuals whose normal service is cut short due to invalidation out of service which is based on recommendations of an Invalid Medical Board.

21. For cases of invalidation out of service, the eligibility criteria for service element of the pension is relaxed in the following ways:-

(a)  For Invalidation Cases where Disability is Attributable to/ Aggravated by Service.

(i) There is no requirement of a minimum qualifying service for earning service element of pension.

(ii) Service element of pension will be at 50% of last drawn pay or last 10 month’s average pay whichever is more beneficial. There will be no pro-rata reduction for less than 20 years of service required to earn full pension (applicable after VI CPC only).

(b)  For Invalidation cases where disability is neither attributable to nor aggravated by service (NANA).

(i) If the officer has a qualifying service of 10 years or more, he will be eligible for service element of pension at 50% of last drawn pay or last 10 months average of his pay whichever is more beneficial.

(ii) For service less than 10 years, the officer will be entitled for invalid gratuity only. Last drawn pay and reckonable emoluments are one and the same i.e. Band Pay, Grade Pay, MSP & NPA.

22. For Invalidation Cases, the Eligibility Criteria for Disability Element of the Pension are Also Relaxed in the Following Ways:-

(a) There is no requirement for a minimum disability of 20%, to earn disability element of pension for invalidation cases. Disability percentage for invalidation cases are broad banded to a higher percentage as specified. The Govt rules on broad banding of disability percentage ensures that nobody is invalided out of service, with disability attributable to or aggravated, which is less than 50%. Thus in invalidation case, the corresponding disability element of disability pension is bound to be higher and more beneficial (when compared to disability element calculated for superannuation / PR cases).

(b) The existing provisions of broad banding, of disability percentage for invalidation cases are as follows:-

(i) 01-49 % disability : Get 50% as disability element

(ii) 50-75% disability : Get 75% as disability element

(iii) 76-100% disability : Get 100% as disability element

War Injury Pension

23. War injury pension is given to an individual who receives injury under circumstances mentioned in category E of relevant Govt letter. Category E covers war or war like operations, operations specially notified by Govt, actions against terrorists/ extremists/ anti-social elements, Battle inoculation training exercise etc. War injury pension is of two types: -

(a) When an individual is invalided out of service due to his war injury.

(b) When the individual is retained in service and he proceeds on normal or premature retirement.

24. In both the cases of war injury, the service element is similar to retiring pension i.e. 50% of last reckonable emoluments. There is no requirement of a minimum qualifying service for eligibility to service element of pension. However for cases of war injury leading to invalidation out of service, the war injury element for 100 % disability is equal to 100% of last reckonable emoluments. For cases where individual is retained in service he is entitled to war injury element @ 60% of last reckonable emoluments for 100% disability subject to a minimum of Rs 7020/- at the time of retirement. For disability which is less than 100% the war injury element will be reduced proportionately. Wef 01-07-2009 there is no restricting upper ceiling/cap on the aggregate of service element and war injury element of war injury pension.

25. Constant Attendance Allowance.  A Constant Attendance Allowance at the rate of Rs 3000/- pm may be granted to service personnel who are awarded disability pension for100% disablement, if in the opinion of the IMB/RMB/RSMB, service personnel needs the services of a Constant Attendant and the necessity arises solely from the conditions of accepted disability/disabilities. Further, this rate will be increased by 25% every time the dearness allowance payable on revised Pay goes up by 50%.The allowance is not admissible during indoor treatment at a hospital or during the period of employment.

Summary: Rates of Disability Pension

26. The rates of disability element of pension for 100% disability are given below. DR is admissible on disability element of pension. For disability lesser than 100%, the amount has to be reduced proportionately. The rates for 100% disability are:-

(a) For normal disability element - 30% of reckonable emoluments

(b) For war injury element when - 60% of reckonable emoluments
Retained in service

(c) For war injury element when - 100% of reckonable emoluments
Invalided out of service

Medical Opinion in Deciding Attributability /Aggravation Factor

27. The eligibility of Disability element of pension is directly dependent on the Attributability /aggravation aspect of disability. The only agency which is competent to comment upon disability is the medical board for diseases and the Court of inquiry/injury report for injury cases. The medical officers have well - defined guidelines on this matter from the Govt, in the form of entitlement rules and guide to medical officers. The court of inquiry/ injury report is based on evidence and witnesses. The courts have said that the opinion of the medical board holds primacy in this matter. Thus, the attributability / aggravation factor of a disease is primarily dependent on the opinion of the medical board. Similarly attributability/ aggravation factor for cases of injury primarily depends on the findings of COI /injury report.

Attributability Factor for Injury while on Duty

28. The COI/ injury report will recommend an injury as attributable only when the injury has taken place while performing duty. The following cases will also be considered on duty: -

(a) Injury while proceeding to or returning from place of duty on the normal route.

(b) Injury while proceeding on leave or retuning from leave if injury takes place during journey period between duty station and place of leave. Mode of travel, type of leave and using a warrant / form D etc. has no relevance on this attributability. However once an indl has reached his place of leave, any injury thereafter will not be attributable unless he has been specifically tasked to undertake a service task during leave by a competent authority and the injury takes place while carrying out that task.

Review of Beneficial Provisions for Pre and Post 2006 Disability Pensioners

29. The other beneficial provisions of disability pension are as given below:-

(a) New Rates of Disability Element. The earlier rates for 100% disability element of pension have been revised. Vide a Govt letter dated 15 Feb 11, 100% disability element has been revised to 30% of the notional pay as per modified parity method, for pre -2006 pensioners. For war injury (retained in service) and war injury (invalidation out of service) the rates are 60% and 100% respectively. For disability, which is less than 100%, proportionate reduction will be done in the amount.

(b) Broad Banding for Invalidation. Broad banding of disability pension for invalidated officers (due to attributable/aggravated causes) was permitted for the first time in V CPC i.e. wef 01-01-1996. This broad banding of disability percentage is done to the nearest higher figure at 50%, 75% and 100%. Earlier this facility was not extended to pre 01-01-1996 pensioners. Wef 01-07-2009, this facility has been extended to all pre 01-01-1996 disability pensioners who were invalidated out of service, due to attributable/aggravated causes. The effective date of broad banding for pre-1996 invalid pensioners is likely to be changed by the Govt from 01-07-2009 to 01- 01- 1996 in near future. MoD (Deptt of ESW) has agreed to revise the policy in line provisions applicable for Central Govt Employees.

(c) Disability Pension @ 60% of Reckonable Emoluments. For permanent disability of 60% and above the disability pension (service + disability element) shall not be less than 60% of reckonable emoluments last drawn. For past cases, if the PPO is not reflecting the correct rate of disability pension then it will have to be revised through a Corr. PPO.

(d) Authorisation of Service Element of Pension to Emergency commissioned and SSC officers. As per the provision of SAI 6/5/65, EC/SSC officers were granted Service element by taking the service only up to the date of sustaining injury / disability.Now vide GOI MoD letter No 1(9)/2006/D(Pen-C) dated 30 August 2006 , the EC/SSC officers whose disability is attributable to/aggravated by service and who are entitled to disability element will also be entitled for service element of disability pension as per existing provisions as applicable to a Permanent Commissioned Officer. For those Emergency Commissioned and SSC officers who are in receipt of disability element and have retired before 30 August 2006, following provisions of Govt letter will apply:-

(i) Those officers whose disability was attributable to service at the time of retirement will be entitled for service element wef 30 Aug 2006 (prospectively). No arrears will be admissible due to notional fixation of revised pension for the period prior to 30 August 2006. No commutation will be admissible and there shall be no change in the retirement gratuity already paid.

(ii) Those officers whose disability was aggravated by service at the time of retirement will not be entitled for service element of disability pension. For cases of aggravation, service element of disability pension will be granted to only those emergency commissioned & SSC officers who have retired on 30 August 2006 or there after i.e. issue date of Govt letter.

(iii) Past cases will not be opened.

(e) Removal of Previous Cap on War Injury Pension. As per earlier rules, the total of service element and War injury element could not exceed the last pay drawn. This cap has been removed wef 01 July 2009 for all pensioners including all past pensioners vide MOD letter 10(01)/D(Pen/Pol)/2009/Vol.II dated 19 January 2010 and MOD letter no 70(4)/2008(1)D (Pen/Policy)/-Vol-V dated 15 Feb 2011 ( follow up PCDA(P) Circular No 456 dated 18 Mar 11). For the purpose of deciding last pay for pre-2006 pensioners notional pay as per VI CPC will be taken i.e. Minimum of the pay in the Pay Band +Grade Pay +MSP+ X Group Pay (where applicable).

(f) Provision for Additional Pension on Disability Element of Pension after 80 years of Age. Additional pension with DR as per prescribed rates is authorised on disability element of pension after reaching the age of 80 years. The rates for this additional pension are additional 20% of basic pension at age of 80 years, 10% increase of basic pension with every five years increase in age (i.e. 30% for 85 years, 40% for 90 years and 50% for 95 years). Once a pensioner completes 100 years of age, the additional pension will be increase to 100 %.

(g) Exemption from Income Tax. Disability pensioners are exempted from income tax on their whole pension which includes service element and disability element.

(h) Payment of Ex-Gratia Lump-sum Compensation to Defence Service Officers and Personnel Below Officer Rank who are Invalided out of Service on account of Disability Attributable to or Aggravated by Military Service. Such Defence Service personnel, who are disabled, incapacitated in the performance of their bonafide official duties under various circumstances and are boarded out from service on account of disability / war injury attributable to or aggravated by military service, shall be paid Ex-gratia lump sum compensation amounting to Rs. 9 lac for 100% disability. For disability / war injury less than 100% but not less than 20%, the amount of Ex-gratia compensation shall be proportionately reduced. No Ex-gratia compensation shall be payable for disability war injury less than 20%. The proportionate compensation would be based on actual percentage of disability as certified by the Invaliding Medical Board, without applying broad banding provisions as contained in Para 7.2 of MoD letter No. 1(2)/97-D (Pen-C) dated 31 Jan 2001.This shall be admissible to those invalidated out on or after 01 April 2011.

(j) Lump Sum Compensation in lieu of War Injury Element/Disability Element. Armed Forces personnel, who are retained in service despite disability due to war injury or due to causes held attributable to /aggravated by military service, can opt for compensation in lump sum in lieu of War Injury Element/Disability Element on final retirement. For computation of capitalized value of war injury/disability element, age on next birthday is reckoned with reference to the date of onset of disability as per the recommendations of Medical Board. The compensation is paid on the rank and emoluments held by the personnel at the time of disability.
Note: Once lump sum compensation is paid in lieu of war injury/disability element there shall be no further entitlement on account of the disability on subsequent retirement.

(k) Liberalized Disability Pension. Service personnel sustaining disability due to acts of violence/attack by terrorists, anti-social elements etc, shall be entitled to same Pensionary benefits as admissible to war injury cases on invalidment /discharge including lump-sum compensation in lieu of disability. However, on invalidment they will be entitled to disability element instead of war injury element in addition to service element.There shall be no condition of minimum qualifying service for earning this element. In no case aggregate of service element and disability element shall be less than 80% of reckonable emoluments last drawn.

(l) Entitlement to War Injury/Disability Element on Premature Retirement. An Armed forces personnel whose disability is 20% or more and attributable/aggravated to military service and has been retained in service despite disability shall be entitled to disability/war injury element on premature retirement wef 01 Jan 06 provided he has not obtained lump sum compensation in lieu of disability.

Minimum Pension

Wef 01-01-06 the minimum rates of pension for various types of pension for are as follows:-