Employees of the central government are very keen to know about the DA Arrears Payment 18 Months, which refers to the amounts due under the Dearness Allowance (DA) that have been frozen from January 2020 to June 2021. The news update of November 2025 is the latest in a series of disappointing news: The Finance Ministry has once again confirmed that these arrears will not be paid, giving as reason the ongoing fiscal constraints that the government is experiencing after the COVID pandemic. The email notification explains that the three parts of the scheme that have been withheld (those due in Jan 2020, Jul 2020, and Jan 2021) add up to 17% on the pre-freeze rates by combining 3%+7%+7%. So, go through the areas of benefits not received, the conditions of who is eligible to get it, the regulations, and the employees/investors’ impact—keep up to date with this as it concerns your finances!
Latest Updates 2025: No Relief in Sight
The 2025 update confirms that the government’s position is unyielding. In the responses to the parliament of August, the Minister of State for Finance, Pankaj Chaudhary, said that payment of the arrears remains unfeasible due to the fiscal spillover effects of COVID, even though the fiscal deficit has reduced to 4.4% in the budget estimate for FY26. News from NC-JCM meetings and union demands has revealed that continuous advocacy is ongoing but still no payout for the festive season as was speculated before. The DA is now at 55% (it was increased by 2% in March), and another 3% hike is expected in July 2025—but the 18 months freeze is excluded. Arrear dues don’t earn interest as payment is denied.
Key Highlights
- Frozen Period: 3 installments between Jan 2020 and Jun 2021.
- Estimated Dues: Between ₹11,880 and ₹2.18 lakh per employee.
- Govt Savings: ₹34,402 crore reallocated to welfare.
Eligibility Criteria: All Affected Staff
The DA Arrears Payment 18 Months eligibility criterion encompasses central employees/pensioners on the payroll from January 1, 2020, to June 30, 2021, under the 7th CPC. Civilian and defense personnel, pensioners are included, while states/contractuals are excluded. It is automatic via the pay matrix—no claims are required, but denial affects 5 million employees and 6.5 million pensioners. The payroll linked to Aadhaar establishes the individual’s status.
Rules and Scheme Details: Freeze Permanent
Scheme details can be traced back to the April 2020 OM: DA/DR frozen at the January 2020 levels until July 2021, resumed without back pay. Rules: No retroactive increases; arrears not attainable as per the fiscal policy. The calculation is based on: missed DA % × Basic Pay × 18 months. If paid, it is taxable; no penalty interest rate is applicable. Unions pursue through JCM but Cabinet retains veto power.
Key Highlights
- Missed Slabs: 4% (Jan’20), 3% (Jul’20), 4% (Jan’21)—total effective 11%.
- Payout Mode: Denied, regular DA through DBT.
- Appeals: Parliament queries denied.
Benefits and Impact: Lost Opportunities
Incentives that have not been taken: The starting salary (based on the basic pay of ₹18,000) misses the mark of ₹35,000+ and those on Level-14 can get up to ₹2.18 lakh—debt, schooling, etc. are all made easier. No extra profits mean no extra spending; wages are the area hit the hardest by the freeze on pensions for retirees.
The employees will face a decline in morale, and their investments will be delayed. Investors won’t have the benefit of: The arrears could have been invested in 7.5% fixed deposit accounts (annual interest of more than ₹15,000 on an amount of ₹2 lakh) or stocks. The impact is that the potential stimulus of ₹1 lakh crore has been kept in reserve. Unions warn of attrition but the government is prioritizing the control of the deficit while preparing for the 8th CPC.
Key Highlights
- Financial Hit: Each person loses between 30,000 and 2 lakh.
- Investor Loss: Not being able to take advantage of compounding.
- Economy: Less money spent by senior citizens.
Conclusion: Monitor 8th CPC for Hope
The DA Arrears Payment 18 Months continues to be on hold in the 2025 update, dashing any hopes that the last news was good despite the clear explanation of eligibility and scheme details. While benefits are being lost, keep an