On One-Time Lumpsum Pension Payouts, A Clarification From Government
The Department of Pension and Pensioners' Welfare (DoPPW) has clarified that Central government employees who have already opted to withdraw a percentage of their basic pension as a lumpsum payout are not permitted to do that on a second or subsequent occasion.
In an office memorandum dated October 31, the DoPPW highlighted that as per the provisions of the Central Civil Services (Commutation of Pension) Rules, 1981, the lumpsum payout of pension on more than one occasion is not allowed.
According to Rule 5 of the CCS (Commutation of Pension) Rules 1981, a government employee can commute, or withdraw, up to 40 per cent of the basic pension as a lump-sum payment.
The DoPPW clarification comes after it received references and representations regarding the lumpsum withdrawal of a portion of pension for a second time.
Many government employees asked whether it's permissible to withdraw, or commute, the remaining percentage of the basic pension for a second time within the 40 per cent limit for those who have already opted for it.
The memorandum stated that as per rule 10 of CCS (Commutation of Pension) Rules, if a person commutes (withdraws) a percentage of his final pension and the pension is later revised and enhanced retrospectively after the commutation (withdrawal), then they shall be paid the difference.
The difference is the amount between the value already authorised and the value determined after taking into consideration the increase in pension.
However, it clarified that there is no provision under the 1981 Rule for withdrawal, or commutation, of a portion of the pension within the limit for the second time when the person had originally taken a percentage below 40 per cent of the basic pension.
In addition, the memorandum underlined that an applicant is not required to file a new application to pay any differential amount.
According to the DoPPW's OM dated October 24, 2016, "those pensioners who retired from 01.01.2016 till 04.08.2016, i.e. the date of issue of orders for revised pay/pension based on the recommendations of the 7th CPC, may be given an option, in relaxation of Rule 10 of CCS (Commutation of Pension), Rules, 1981, not to commute the pension which has become additionally commutable on revision of pay/pension on implementation of recommendations of the 7th CPC."
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