Indian Military Veterans

Analysis of PCDA Circular No. 200 and Pension Regulations - SPARSH will Deduct DR with Life Certificate ?

Re-employment after military retirement is a common practice among Junior Commissioned Officers (JCOs) and Other Ranks (ORs). However, there is still confusion about Dearness Relief (DR) on pensions and the rules for pay fixation in Central and State Government offices, Public Sector Undertakings (PSUs), autonomous bodies, and banks. The PCDA (Pensions) Circular No. 200, issued on 12 April 2018, provides clear guidance on when DR is applicable and the specific criteria for determining eligibility. 

This article aims to explain the circular in straightforward terms, connect it to relevant pension regulations, and present a step-by-step action plan for ex-servicemen who may be affected. 

Understanding DR eligibility is important for re-employed JCOs and ORs.

Thousands of PBOR retirees lose DR during re-employment because:

• Pay fixation is wrongly done by protecting last pay drawn during military service
• Pension is incorrectly deducted during pay fixation
• DR is automatically stopped in the SPARSH system after marking “Re-employed”
• Employers do not issue mandatory pay fixation certificates

This results in loss of DR arrears running into lakhs of rupees.

Circular 200 resolves these issues by clearly defining who is eligible and who is not.

Understanding PCDA Circular No. 200 (12.04.2018)

Circular 200 consolidates & clarifies instructions issued earlier under:

• DoPT OM dated 18 July 1997 (core DR eligibility rule)
• PCDA Circular 166
• PCDA Circular 173
• PCDA Circular 179

• Five major points of PCDA Circular 200
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This circular provides clarifications regarding the payment of dearness relief to re-employed pensioners and employed family pensioners.

Payment of Dearness Relief

• Prior to 18/07/1997, dearness relief for re-employed pensioners and family pensioners was suspended during re-employment under government or statutory bodies.
• From 18/07/1997, specific provisions were established for re-employed pensioners, particularly those who held posts below Group ‘A’ or ranks below commissioned officers. These pensioners can receive dearness relief if their re-employment pay is fixed at the minimum of the pay scale, ignoring their pension amount.
• Certificates from employing departments must confirm the pensioner’s previous post and the pay fixation details.
• For re-employed pensioners who held Group ‘A’ posts or commissioned officer ranks, their pay is fixed based on their last drawn salary, and they are not entitled to dearness relief on their pension during re-employment.

Conditions for Dearness Relief

• Disability pensions are treated similarly regarding dearness relief during re-employment.
• If a pensioner ceases re-employment, dearness relief becomes payable from that date, requiring a cessation certificate from the employer.
• Certain categories, such as those receiving consolidated pay without dearness allowance or elected officials, are eligible for dearness relief regardless of re-employment status.
• Employed family pensioners are entitled to dearness relief on their family pension, as it is not considered in their pay fixation.

This circular aims to clarify the eligibility and conditions under which dearness relief is applicable to various categories of pensioners and family pensioners, ensuring compliance with government regulations.

These collectively define DR entitlement for Personnel Below Commissioned Rank (PBOR) during re-employment.

Eligibility for DR on Pension During Re-Employment

As per Government of India decision dated 18/07/1997 and PCDA Circular 200:

Re-employed JCOs/OR are eligible for DR on pension IF AND ONLY IF all the following conditions are met:

 Pension is completely ignored for pay fixation

No part of the military pension should be adjusted/deducted while fixing re-employed pay.

 Pay is fixed at the minimum of the pay scale of the re-employed post

This is the most crucial condition.

No last pay protection (LPP) allowed for PBOR

PBOR are not entitled to last pay protection during re-employment.

 Advance increments allowed only if

• Issued under a valid departmental policy, and
• Even after increments, pay does not exceed last pay drawn in the Army.

When these conditions are met, the re-employed ex-serviceman continues to receive full DR on pension.

Who is NOT Eligible for DR During Re-Employment

DR is not admissible if any of the following apply:

✘ Last pay drawn in the Army is protected

If re-employed pay is fixed equal to or above last military pay.

✘ Any portion of pension is deducted during pay fixation

Even partial deduction makes the individual ineligible.

✘ Pay is fixed above minimum due to last pay protection

Not allowed for PBOR.

✘ Advance increments granted solely to match previous pay

This is treated as indirect last pay protection.

In all the above cases, the ex-serviceman is categorized as “Re-employed without DR”.