The Central Government has announced an increase in Dearness Relief (DR) for a specific group of old Central government employees and family beneficiaries covered under the 5th Central Pay Commission structure.
The decision was shared through an Office Memorandum issued by the Department of Pension and Pensioners’ Welfare (DoP&PW) on May 22, 2026.
The revised DR rates will be effective from July 1, 2025, and January 1, 2026.
Who Will Benefit From the DR Hike?
The increase applies only to a limited category of old CPF (Contributory Provident Fund) beneficiaries and their eligible family members.
The first group includes retired CPF beneficiaries who retired between November 18, 1960, and December 31, 1985, and are receiving ex-gratia payments.
For these beneficiaries, Dearness Relief has been increased to:
474% from July 1, 2025
483% from January 1, 2026
These revised rates apply to ex-gratia payments of Rs 3,000, Rs 1,000, Rs 750, and Rs 650 meant for Group A, B, C, and D employees.
Relief Extended to Family Beneficiaries
The revised DR rates will also benefit widows and eligible dependent children of deceased CPF beneficiaries.
This includes cases where the employee retired before January 1, 1986, or died while in service before that date.
Beneficiaries receiving revised ex-gratia payments of Rs 645 per month will now receive:
466% DR from July 1, 2025
475% DR from January 1, 2026
The same revised rates will also apply to certain Central government employees who retired on CPF benefits before November 18, 1960.
How the New Payments Will Be Calculated
The government clarified that if the DR calculation results in a fraction, the amount will be rounded off to the next higher rupee.
Pension disbursing authorities, including nationalised banks, will be responsible for calculating the final payable amount for each beneficiary.
Government Approval and Clarification
The DoP&PW said the decision was taken with approval from the Ministry of Finance’s Department of Expenditure.
For employees of the Indian Audit and Accounts Department, the order was issued after consultation with the Comptroller and Auditor General (CAG) of India.
The government has also clarified that these revised DR rates apply only to specific old CPF and ex-gratia beneficiary categories under the 5th Central Pay Commission structure.
The hike does not apply to all Central government employees or pensioners.
Why This Matters
For many old pension and ex-gratia beneficiaries, even a small increase in Dearness Relief can help manage rising living costs.
As inflation and daily expenses continue to rise, the revised DR rates are expected to provide some financial support to affected families and retirees.
