Pensioners in India include retired government employees eligible for individual or family pension from the government. In continuance from their salaries, pensioners receive a dedicated percentage of their pension to mitigate inflation. However, this component, known as Dearness Allowance (DA) in salary, is called Dearness Relief (DR) in pension.<\/p>\n
DR<\/a> is often paid to retired central and state government employees, railways and defence personnel, public sector staff, and bank employees across the country. The beneficiaries include close to 65 lakh pensioners across various pay scales.<\/p>\n Also Read<\/strong> | 8th pay commission: Components of salary structure in focus, explained<\/a><\/p>\n Notably, in India, DA and DR are provided only by the public sector for its employees and retirees. The private sector does not offer the same for employees or pensioners<\/a>. Here’s all you need to know:<\/p>\n Are DA and DR calculations similar?<\/p>\n As a component of the monthly salary, DA is revised biannually based on the 12-month average of the All-India Consumer Price Index (AICPI<\/a>), with announcements in early March and October, followed by rollouts in January and July. Notably, each time DA is adjusted or revised by the pay commission, a similar change is reflected in DR accordingly.<\/p>\n DR impacts the in-hand pension <\/a>payout for retired central government staff who receive an individual or family pension from the government. Under the 7th CPC, there have been 10 hikes since 2021, with the highest at 11% in July 2021. The past two hikes were 2% and 3%, respectively, for January and July 2025.<\/p>\n Also Read<\/strong> | DA hike: Full list of states considering Dearness Allowance increases for staff<\/a>Eligibility: Can pensioners lose DA or DR?<\/p>\n According to a report by Clear Tax, pensioners cannot get DA when re-employed, and DA is granted on a time scale or fixed pay. Further, DA is not paid to pensioners when they reside in a foreign country during re-employment<\/a>. But pensioners residing abroad without being re-employed are eligible to get DA on their pension.<\/p>\n 8th CPC: Key pension-related demands<\/p>\n The National Council \u2014 Joint Consultative Machinery (NC-JCM<\/a>), Maharashtra Old Pension Organisation and All India Defence Employees Federation (AIDEF) have made detailed submissions to the commission. Overall, they have demanded comprehensive pension restructuring, improvements and parity in payments:<\/p>\n Demands made by other employee groups and stakeholders include:<\/p>\n DA, DR announcements this year<\/p>\n The Finance Ministry in April announced revision in DA and DR by 2%, up from 58% to 60% of Basic Pay, with effect from 1 January 2026. In May, the Indian Banks’ Association (IBA) also announced revised DA and DR<\/a> for workmen and officer employees across levels for the months of May, June and July 2026. It hiked basic salaries between \u20b948,000 and \u20b91,17,000 and DA from \u20b9435 to \u20b91,050. This was followed by a 2% DA and DR hike announced by the Indian Railways on 13 May.<\/p>\n Also Read<\/strong> | New gratuity rules from 1 April: What changes for employees?<\/a><\/p>\n Various state governments also increased salaries in order to close gaps in payment with the central government. Notably, since DA is connected to cost-of-living, the amount for state government employees <\/a>differs depending on their work location and can vary depending on the area being urban, rural or semi-urban.<\/p>\nEmployee GroupPension Reform<\/strong><\/tr>\n \n NC-JCM<\/td>\n Structural alignment with revised pay<\/td>\n<\/tr>\n \n Maharashtra Old Pension Organisation<\/td>\n OPS restoration + UPS reforms + DA linkage<\/td>\n<\/tr>\n \n AIDEF<\/td>\n Pension parity with revised pay structure<\/td>\n<\/tr>\n \n
Age of PensionerProposed Pension Level<\/tr>\n \n 65 years<\/td>\n 70% of Last Pay Drawn<\/td>\n<\/tr>\n \n 70 years<\/td>\n 75% of Last Pay Drawn<\/td>\n<\/tr>\n \n 75 years<\/td>\n 80% of Last Pay Drawn<\/td>\n<\/tr>\n \n 80 years<\/td>\n 85% of Last Pay Drawn<\/td>\n<\/tr>\n \n 85 years<\/td>\n 90% of Last Pay Drawn<\/td>\n<\/tr>\n \n 90 years and above<\/td>\n 100% of Last Pay Drawn<\/td>\n<\/tr>\n