Gratuity Update: For central government employees, gratuity isn’t just a word, it’s a guarantee of post-retirement security. But what if you’ve worked for two different government organizations? Will you receive gratuity twice, or will the government deduct the money for the second term?

To resolve this confusion, the Central Government’s Department of Pension and Pensioners’ Welfare has issued a crucial clarification. This new order, issued for employees covered by the National Pension System (NPS), clarifies when your gratuity will be capped and when you will receive the full benefit.

What will be the impact on re-employment?

The government has cited Rule 4A of the “CCS (Payment of Gratuity under NPS) Amendment Rules, 2025” as the basis for its memorandum. Simply put, this rule prevents “double benefit.” The department has clarified that if a government employee retires and has already received their gratuity, they will not be paid a separate gratuity for that second term upon re-employment. This means that once a retirement gratuity is received from the government treasury, they cannot claim the gratuity again upon re-employment in the same system.

This order has slightly different rules for employees who have entered central government service after obtaining due permission from a PSU or autonomous body. The news is a bit of a relief for such employees, but with one condition. If you came from a PSU, you are entitled to retain your gratuity there and will also receive gratuity for your service with the central government. However, the government has imposed a ceiling here.

According to the rules, the total gratuity received from both places cannot exceed the amount an employee would have received if they had served their entire service (PSU + central government) continuously in the central government. The same formula applies to those who have left a state government job and joined the central government. Overall, money will come from two pockets, but the total limit will be determined by your final salary and total service period.

The biggest relief in this entire matter is for our former soldiers. The government has received numerous questions about what will happen to those who join the civil service after military service. After consulting with the Department of Expenditure, the government has clarified that this gratuity limit rule will not apply to former soldiers.

This means that if someone has served in the military and received a gratuity, they will receive their full civil service gratuity upon joining the civil service. Their civil service gratuity will not be reduced by even a single rupee due to the military gratuity received.

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