Dearness Allowance and Dearness Relief

According to ET, Central government employees recently got a 4% increase in their Dearness Allowance (DA), bringing it to 50%.Retirees also saw their Dearness Relief (DR) go up by 4%, now also at 50%, to help offset rising prices. This boost means higher salaries for employees and bigger pensions for retirees.

Allowance adjustments following DA hike

Following the increase in DA to 50% earlier this year, certain allowances, like the Children’s Education Allowance (CEA) and the Hostel Subsidy, automatically got a boost of up to 25%.
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An Office Memorandum (OM) issued by the Ministry of Personnel, Public Grievances, and Pension’s Department of Personnel & Training on April 25, 2024, states that the limits for Children’s Education Allowance (CEA) and Hostel Subsidy will automatically increase by 25% every time the DA in the revised pay structure reaches 50%.
Recently, many inquiries have been made about the new CEA and Hostel Subsidy limits after the latest DA increase to 50% from January 1, 2024. This DA increase was announced by the Ministry of Finance’s Department of Expenditure on March 12, 2024.
Here are the updated limits for Children’s Education Allowance (CEA) and Hostel Subsidy starting from January 1, 2024:
– Children’s Education Allowance (CEA): Government employees can claim a set amount of Rs 2,812.5 per month for this allowance, regardless of what they actually spend.
– Hostel subsidy: Employees can also get Rs 8,437.5 per month as a subsidy for hostel expenses.
– Divyang children: Employees with Divyang (differently-abled) children receive twice the regular CEA amount, totaling Rs 5,625 per month.
– Special allowance for child care: Women employees with disabilities are eligible for Rs 3,750 per month, depending on certain conditions.
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Impact on central government employees’ salaries

Consider a central government employee earning a basic salary of Rs 45,700 per month. When the DA rate was 46%, this employee received Rs 21,022 as DA. After the rate increased to 50%, the DA rose to Rs 22,850. This means the employee’s DA increased by Rs 1,818 (calculated as Rs 22,850 minus Rs 21,022).

Additional allowances affected by the DA hike

Beyond the CEA, Hostel Subsidy, and Special Allowance for Child Care, several other allowances also experience an increase due to the latest DA hike:
– House Rent Allowance
– Transportation Allowance on transfer
– Gratuity ceiling
– Dress allowance
– Mileage allowance for personal transport
– Daily allowance