Finance Ministry officials have confirmed that the 8th Pay Commission will not merge dearness allowance (DA) or any relief component with basic pay. The decision keeps the existing structure of pay and allowances intact for central government employees and pensioners.
What this means for employees and pensioners
- DA remains separate: Cost-of-living adjustments will continue to be paid as a distinct allowance rather than being added to basic pay.
- Pension calculations unchanged: Pension benefits tied to basic pay will not automatically increase because DA or relief is not being absorbed into the basic salary.
- Take-home pay unaffected immediately: There is no immediate change to salary structure — only the composition remains the same.
Why merging DA and basic pay is often discussed
Many employee groups and pensioners push for a merger because adding DA to basic pay can raise pensions, enhance benefits tied to basic salary, and simplify pay structure. But merging also raises long-term fiscal liabilities for the government, which makes it a sensitive policy choice.
Implications for the government budget
Keeping DA and relief separate helps the government manage recurring liabilities. If DA were merged with basic pay, it could permanently increase payroll and pension costs, affecting long-term budget planning.
What to expect next
The confirmation means current rules on allowances and pension calculations remain in effect. Employees and pensioners should watch for official notifications or detailed orders from the Finance Ministry for any technical clarifications. Future Pay Commissions may revisit the issue, but any change would require formal government approval and clear implementation guidelines.
Bottom line: The structure of pay and allowances under the 8th Pay Commission will continue with DA and relief paid separately from basic pay, maintaining the status quo for now.