The government has hiked the dearness allowance (DA) component for central government employees by 4% to 38% (from 34% earlier) effective from July 1, 2022. This is the second hike in DA by the government this year, which was due. The first hike in DA was announced on March 30, 2022 (effective from January 1, 2022). Apart from DA hike, the government has also hiked the dearness relief (DR) for pensioners with same percentage.

A tweet by PIB said: Cabinet approves release of additional instalment of Dearness Allowance and Dearness Relief @ 4% to Central Government employees and pensioners, due from 01.07.2022.

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Dearness allowance (DA) hiked by 4% for central govt employees, pensioners

A hike in DA translates to a hike in the salary of government employees. So, how much will a central government employee’s salary increase in actual monetary terms after a 4% hike in DA?

How much monthly salary will increase after the Dearness Allowance (DA) hike

The hike in Dearness Allowance
(DA) is calculated on the basic pay of a government employee.

Let us say the basic pay of a junior-level central government employee is Rs 20,000 per month. Earlier, at the rate of 34%, the central government employee was receiving DA of Rs 6,800 per month. Now after it has been hiked to 38% the same government employee will receive DA of Rs 7,600 a month. Thus, due to the hike in DA, his salary has increased by Rs 800 per month.

Similarly, for government pensioners and family pensioners receiving pensions from the central government, the hike in dearness relief (DR) will be calculated on the basic pension amount. The basic pension amount will be mentioned in your Pension Payment Order (PPO).

Dearness allowance percentage is reviewed and re-fixed/ increased by the government twice every year on January 1 and July 1. The next DA/DR hike is due on January 1, 2023.

What is dearness allowance/Dearness Relief?

Dearness allowance is usually received by government employees to compensate for rising inflation. The decision announced today will put more money in the hands of government employees and pensioners.

Dearness Allowance/Dearness Relief is paid to central government employees/pensioners to adjust for the cost of living and to protect their basic pay/pension from erosion in real value.