7th Pay Commission latest news: Here is what was recommended on gratuity and what Centre accepted in case of demise of central government employees

7th Pay Commission: Certain payments are clear to employees but perhaps not to the members of their families. So, understanding certain issues is important so that family members are prepared  and do not have to suffer undue problems later. One such sensitive issue is death during employment of the central government employees. Pension and Gratuity are one of them. Out of these two, gratuity is more complex for the family member of the government employees. And it is easily understandable in case the employee passes away during his or her service years. So, rationalisation of the gratuity is the must that both government employee and it's family members should know. As per the 7th Pay Commission recommendations, which has been accepted by the Centre, if a government employee dies in less than one year of his or her services, rate of death gratuity is two times of his or her monthly emoluments. 

The rate of death gratuity emoluments would increase to six-time if the government employee has died in the service period of more than one but less than five years of services, while in case of government employees service period spans 5 years or more but less than 11 years the rate of death gratuity would be 12 times of monthly emoluments. The 7th pay Commission further recommends that if the length of service is 11 years or more but less than 20 years then in such case rate of death gratuity would be 20 times of monthly emoluments. If the length of a central government employee's service is 20 years or more then the rate of death gratuity would be Half month of emoluments for every completed six monthly periods of qualifying service subject to a maximum of 33 times of emoluments. For more details, one can read the Para 10.1.41 of the 7th Pay Commission Report where the death gratuity has been recommended by the panel in full detail.

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Currently, central government workers with five or more years of service are eligible for tax-free gratuity after leaving the job or at the time of superannuation under the Payment of Gratuity Act, 1972. The 1972 Act was enacted to provide for gratuity payment to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments.

For further information to the formal sector employees, the central government has amended the  Payment of Gratuity Bill in 2017 paving the way for doubling the limit of tax-free gratuity to Rs 20 lakh and empowering the government to fix the ceiling of the retirement benefit through an executive order. The Rajya Sabha passed the bill, which was approved by the Lok Sabha on March 15, 2018.