In an important change, the authorities have confidently paved the way to DA arrears for the employees and pensioners of the central government that have been pending for 18 months. The 2025 revision has not only clarified the issue but also rekindled the hope of about 12 million beneficiaries who were hit by the freeze during the COVID-19 pandemic. The announcement is likely to be a morale booster and lead to better financial conditions for the workers in the public sector.
Latest News & Scheme Details
The government announced a ban on the payment of Dearness Allowance (DA) to government employees and the same for Dearness Relief (DR) recipients from January 2020 to June 2021 on account of the pandemic, which also affected the economy. Though the employees continued their service, they did not get the revised DA during this period.
In August 2025, the Minister of State for Finance stated in Parliament that the matter was under serious consideration. Recent reports suggest that the Union Budget 2026 will have the provision for either partial or full disbursement of the pending arrears.
Key Benefits of the DA Arrear Decision
| Benefit Type | Details |
|---|---|
| Arrears Period | January 2020 – June 2021 (18 months) |
| Eligible Groups | Central govt employees & pensioners |
| Expected Payout | Lump-sum or phased disbursement |
| Financial Impact | ₹34,000–₹2 lakh per employee (estimates) |
| Tax Implications | May be taxable under salary income |
This decision compensates for the inflation-adjusted withholding of salary during the pandemic.
Eligibility Criteria & Rules
- Applicable to all central government staff on the 7th pay scale
- Retired and current family pensioners under the DR scheme are also included
- No application needed – arrears will be paid through payroll
- Approval from the Cabinet and allocation in the budget will decide the final amount payable
Impact on Employees & Investors
- Employees: The government has restored their trust through financial relief.
- Pensioners: They can increase their retirement income and plan better.
- Investors: Increased consumer spending will be the plus for retail, housing, and banking sectors.
Conclusion
The 2025 decision on DA arrears for the period of 18 months is a move that has long been expected and comes as a recognition of the government employees’ commitment even in hard times. Once payouts are made, this update will bring both financial and emotional relief. It is essential for the employees to be aware of the scheme’s details, benefits, and eligibility rules so that they can be ready for the coming changes.
