The big topic that has been reported in all the departments is the pending “arrears” of dearness allowance (DA) and dearness relief (DR) for the officials and the pensioners of the central government. In other words, an arrear is the amount that is due to a worker from the employer because there has been a delay in the payment or there has been a change in the DA, which is backdated. In the year 2025, when the central government announced a 3% DA/DR increase (raising the DA from 55% to 58% and making it effective from July 1, 2025) the employees were expecting payment of arrears corresponding to the period starting from July 2025.
Simultaneously, a controversial issue continues to loom: the DA instalments that were put on hold during COVID (January 2020 to June 2021). Employee’s delegates had anticipated that the amounts held back would be paid as arrears, but the government has recently indicated such payments are not going to happen.
Update Key Aspects
- New Rate’s Effective Date: The 3 % increase was made effective from 1 July 2025.
- Computation Of Arrears: The arrears amount is calculated as the additional DA due from 1 July 2025 until the new rate reflects in salary/pension—i.e., the additional percentage multiplied by basic pay/pension for that period. If the basic pay of an employee is ₹ 40,000 and he/she is gaining 3% DA, then ₹ 1,200 will be added to the pay per month and accordingly, the arrears for, say, three months will arise.
- Non-payment Of Covid-freeze Arrears: The government has said that they will not be paying any DA/DR arrears that are related to the 18-month freeze during the pandemic, which has been a major demand from employee-bodies. This decision has disappointed many.
What It Means For Employees & Pensioners
Approval of the 3 % DA/DR increase has meant an instant increase in the monthly take-home and pension income for the employees and pensioners of the central government. When the payment of arrears is credited, it will give a lump-sum payment. Employees, however, who had earlier hopes of receiving the frozen-period arrears now have to lower their expectations, as the government has given no indication regarding payment on that front.
This news is particularly significant because it might be the last DA revision under the 7th Pay Commission cycle—awaiting the 8th Pay Commission togeneration in January 2026.
Practical Steps For Beneficiaries
- After the payment of arrears, check your pay/pension slip to verify the new DA/DR rate.
- If arrears seem delayed, help your payroll/pension department with your service record details.
- Be aware that arrears might be subject to taxation in the year of receipt (as “income”), so plan your finances accordingly.
- Stay informed: The payments will be made on exact dates as specified by the respective government circulars and notifications.
Also Read: 7th Pay Commission Pension Update 2025: Latest Changes For Central Govt Pensioners