Central government employees and pensioners received noteworthy relief in 2025. With the announcement of an increase in Dearness Allowance (DA) and the payment of arrears, a significant portion of the population is pleased. In this post, we will demystify the latest updates of DA Arrears 2025, its payment date, and payment details in a more appealing manner.
2% DA Hike Announced
As per the Cabinet meeting held on 28 March 2025, the central government approved a 2% increase in Dearness Allowance (DA) and Dearness Relief (DR). This increase is retroactive from 1 January 2025. The decision was based on the All India Consumer Price Index (AICPI-IW) which stood at 143.7 points in December 2024. The rate of DA has now been increased to 55% from 53%. More than 1 crore employees and pensioners will benefit from this change.
Arrear Payments Are Due In April
The announcement of DA was delayed this time, so the arrears for January, February, and March 2025 will now be paid with the salary of April 2025. In other words, employees will receive a one-time payment of three months’ salary arrears. From a wider lens, this financial aid is an enormous benefit to employees and pensioners.
What Is The Expected Financial Gain?
Employees with basic salaries of ₹ 18,000 will now gain an extra ₹ 360 per month due to the 2% DA increase. So, they are eligible to receive ₹ 1,080 as arrear payments for the January-March 2025 period. Concurrently, minimum basic pensioners of ₹ 9,000 will also be eligible to receive an additional ₹ 180 per month. Thus, their total three-month arrear payment would be ₹ 540. All these payments will be credited to their accounts in April 2025.
What About 18 Months’ Arrears?
For quite some time now, discussions have been held regarding the pending DA and DR arrears for 18 months which were not paid during the COVID-19 period. This matter was discussed multiple times in the JCM (National Council) meetings. The government has made it clear, however, that the 18 months of previous arrears will not be settled. Though this decision was disheartening for employees, the recent DA increase has certainly provided some respite.
Eighth Pay Commission And Future
The decision for the formation of the eighth Pay Commission was passed on 16 January 2025. This commission is set to submit its recommendations by 2026 which would alter pension and salary structures. There is a chance that DA could potentially be made zero and absorbed into the basic salary. The subsequent announcement for DA increase is expected in October-November 2025 for the period of July-December 2025.
Relief For Employees
The payment of outstanding dues along with the recent increase in DA will improve the financial position of employees and pensioners. This will enhance their spending capability and provide a boost to the economy as well. This action taken by the government attempts to appreciate the employee’s contribution.
Also Read: EPFO Pension Hike 2025: ₹7,500 Minimum Pension Approved for 78 Lakh Retirees