10 july 2026 Punjab Khabarnama Bureau : The Punjab government has approved a significant relief measure for state government employees who retired between January 1, 2020, and June 30, 2021, allowing them to receive higher notional Dearness Allowance (DA) for calculating gratuity and leave encashment benefits.
The decision is expected to benefit thousands of retired employees whose retirement benefits were calculated during the period when revisions in Dearness Allowance were impacted by the COVID-19 pandemic.
Higher Notional DA for Retirement Benefits
Under the new decision, eligible retirees will be granted the benefit of notional DA while calculating gratuity and leave encashment. Although the additional DA was not paid in cash during the relevant period, it will now be considered for determining these retirement benefits.
The move is aimed at ensuring that employees who retired during the specified period are not disadvantaged due to the temporary freeze on DA revisions.
Who Will Benefit?
The revised benefit applies to:
- Punjab government employees who retired between January 1, 2020, and June 30, 2021.
- Eligible retirees whose gratuity and leave encashment were calculated without considering the higher notional DA.
The government is expected to issue detailed implementation guidelines to the concerned departments for processing revised payments.
Relief for Retired Employees
Employee organisations have welcomed the decision, saying it addresses a long-standing demand of retirees affected by the DA freeze during the pandemic. They believe the measure will provide financial relief to pensioners who had been seeking a revision in retirement benefits.
The enhanced calculation is expected to increase the gratuity and leave encashment amounts payable to eligible retirees.
Implementation Process
Government departments will revise eligible cases based on the notified guidelines. Retirees may not need to submit fresh applications if their departments process the cases automatically, though specific procedures will depend on departmental instructions.
Officials are expected to begin recalculating retirement benefits after the formal implementation orders are issued.
Government’s Commitment
The Punjab government’s decision reflects its effort to address pending issues related to employee welfare and retirement benefits. By allowing higher notional DA for gratuity and leave encashment, the state aims to ensure fair treatment for employees who retired during an extraordinary period marked by the pandemic.