Central Government has issued an important clarification on gratuity payments for employees covered under the National Pension System (NPS). The Department of Pension and Pensioners’ Welfare explained the updated rules through an Office Memorandum (OM) under the CCS (Payment of Gratuity under NPS) Amendment Rules, 2025.
As per Rule 4A, a government servant who retires and later gets re-employed will not receive separate gratuity for the re-employment period. This applies to cases of superannuation, compulsory retirement, or compassionate gratuity.
However, if a person moves from a PSU or autonomous body to central government service with proper permission, they are eligible to get gratuity for both services. Still, the combined gratuity amount cannot exceed what would have been payable for continuous service under the Central Government at the final pay level.
For those who have served in the state and central government, the limit will apply to the total gratuity.
In a major relief, employees who have served in the military and later joined civil services will now get full gratuity for civil service, without deductions for military gratuity.
This clarification removes confusion for many NPS-covered employees, ensuring equal and transparent treatment across service categories.