Already from April 2025, the Unified Pension Scheme (UPS) would make the retirement benefits of government employees in India very interesting. The introduction of the limit for gratuity is awaited long and said to be elevated to Rs 25 lakh. But, this may not be applicable or available to most of the government employees who will get the maximum amount from it. Understand, this would put some employees at a disadvantage.
All about The UPS Gratuity Benefit
As regards the UPS, the amount of the gratuity has risen by a milestone transfer from Rs 20 lakh to Rs 25 lakh, bringing about a considerable difference in the manner retiring employees will now be provided for better financial security. The gratuity amount is calculated as per the last drawn salary and the working years using the standard formula to finally arrive at the gratuity amount.
Eligibility Conditions For Claiming Rs 25 Lakh Gratuity
To have a claim of the maximum gratuity payment of Rs 25 lakh, certain government employees have to fulfil some specific conditions such as the ones listed below:
- Length of Service: Minimum continuous service for 20 years should be completed. Any employee with a shorter tenure would be paid pro-rated gratuity.
- Nature of Employment: Gratuity is paid only to permanent government employees. Other benefits may exist for contractual and temporary employees.
- Retirement Age: Employees who retire at the official retirement age of 60 years are also considered eligible, where those who retire early receive much lower gratuity.
- Disciplinary record: Pending disciplinary action or consideration of a serious employee misconduct record can lead to deductions or disqualification under the gratuity grant.
How Some Employees May Not Get The Rs 25 Lakh Gratuity
- Partial Service: Employees who complete service of less than 20 years of standard tenure are not usually eligible for the maximum gratuity amount.
- NPS Participants: Gratuity benefits for employees under the National Pension System (NPS) would not be equivalent in any way to those under the traditional scheme of old-age pension scheme employees.
- Termination or Dismissal: These workers lose their entitlement to gratuity on one’s denial of service by being dismissed because of misconduct.
- State Governments: Even though the central government capped gratuity at Rs 25 lakh, states would formulate their own rules regarding gratuity amounts.
Conclusion
The Rs 25-lakh cap on gratuity under the UPS is, for sure, a boon for many; however, such people have to monitor their eligibility criterion. It would also benefit the workers to maintain a well-recorded service and clarify with the HR department the claims petitions concerning the gratuity policy. To better understand the planning and government’s perspective on the retirement of employees, an employee would also get some help.
Also Read: Big Relief For Govt Employees: Everyone To Benefit From Government’s Latest Move