new rule of gratuity
NPS Gratuity Rules: A very important news has come out for the central government employees and pensioners. The Department of Pension and Pensioners’ Welfare (DoPPW) has completely clarified the picture regarding the rules of gratuity. Recently, in an office memorandum issued on December 26, 2025, the government has made it clear under what circumstances employees will be entitled to gratuity and when their hands will remain empty. This decision is especially important for those people who are working again after retirement or have retired from the army and joined the civil service.
What is the problem with ‘One Time Terminal Benefit’?
The thing that the government has emphasized the most in its order is the nature of gratuity. According to DoPPW, gratuity for employees covered under NPS will now be considered as “one time terminal benefit” i.e. benefit given once on termination of service. If understood in simple language, gratuity is the amount that is given to the employee at the time of departure in exchange for his service.
The department says that if an employee has received gratuity once on leaving the job due to retirement, compulsory retirement or any other reason, then he will not be given gratuity for the second time on joining the job again. The government’s logic is clear that this benefit cannot be given repeatedly to the same person for different service periods, because it is a final benefit.
What will be the impact on re-employment after retirement?
This rule can be a bit tricky for those who join a government department again after completing their first job. According to the new rules, if a person has taken gratuity during his previous military service or civil service, then he cannot claim gratuity again after re-employment. It is often seen that after retiring from the army, many soldiers join civil services. Till now there was a lot of confusion regarding this, which the government has removed through this memorandum.
There is good news for these employees
However, the government has also given concessions in some special cases. If an employee was earlier working in a Public Sector Undertaking (PSU) or an autonomous body and comes to the service of the Central Government after taking gratuity from there and with due approval, then the rules are slightly different for him. Such an employee can get a separate gratuity for a central government job.
But here too there is a catch. The government has made it clear that the total amount including gratuity at both the places should be the same as what an employee would have received if he had served the Central Government full time. That is, you can avail benefits from two places, but a maximum limit has been fixed.
gratuity accounting
The Pension Department has also clarified the situation for the employees coming from the state government to the central government. Suppose, an employee has previously worked under a state government and has availed the benefit of gratuity there. Later, if he joins the Central Government and wants gratuity here too, then he will get this benefit. The rule is that previous service and present service will be combined, but the total gratuity should not exceed the ceiling set by the government.
Also read- Even after changing the rules, gratuity money is not being received in 1 year, this is the reason