Gratuity

Death/Retirement Gratuity

Retirement Gratuity Formula Minimum Service GO 14 Dated 30-1-1999 APRPR Rule 46. AP RPS 1980 Rule 46 deals with Retirement Gratuity of AP Employees. As per the Andhra Pradesh Revised Pension Rules 1980 Rule 46 and GO No 14 Fin & Plg Dated 30-1-1999 the complete details of Calculation of Retirement Gratuity can be learnt. The Formula for Calculation of Retirement Gratuity is available vide GO 14 dated 30.1.1999. Let us the details of Formula and Rules of Retirement Gratuity, Eligibility and Minimum Service Required for Retirement Gratuity for Employees, who were appointed before 1.9.2004.

1. Eligibility and Minimum Service Required for Retirement Gratuity

2. Formula of Retirement Gratuity

3. Example for Calculation of Retirement Gratuity

Eligibility & Minimum Service Required for Retirement Gratuity.

As per the Rule 46 (1)(a) of Andhra Pradesh Revised Pension Rules 1980 / APRPS 1980::

"A Government servant, who has completed five years qualifying service and has become eligible for service gratuity or pension under Rule 45 shall on his retirement, be granted retirement gratuity:" Hence from the above statement and rule it is clear that a Government Servant who has completed 5 (five) years and retired is eligible for sanction of Retirement Gratuity. A Govt servant who has retired without completion of five years of Service is not eligible for Retirement Gratuity.

Formula ::   Retirement Gratuity Calculation Formula The Government also hereby order that the Retirement Gratuity under Rule 46 (1)(a) of Revised Pension Rules 1980 shall be granted equal to 1/4th of the Pay Last Drawn for each completed six monthly periods of service (Subject to a maximum of sixty six times of such six monthly periods) or 16 1/2 (Sixteen and half) months pay last drawn or Rs.1,75,000 whichever is less. Emoluments for this purpose shall be as defined in Rule 31 of Revised Pension Rules, 1980.  Note: 1. The maximum ceiling amount is amended from time to time.           2. Last Pay Drawn includes Basic Pay and DA.           3. The Total Number of Six monthly periods shall not exceed 66.           4. A fraction of year : 3 months or more be treated as 1 half year.                      (Last Basic Pay Drawn  + D.A.) X  SMP         A  =        --------------------------------------------------                                                      4                                                                                      (OR)         B   =   (Last Basic Pay Drawn  + D.A.) X ¼ X Qualifying Service Half Years ​                                                     (OR) ​         C      =    Rs.1200000 / -   which ever is less.

Example:

There are three conditions mentioned in this rule and out of the three conditions, the least one will be sanctioned as Retirement gratuity.

1. 1/4th of the Last Pay Drawn (Basic Pay + DA) x Half Yearly Service Units/Six Monthly Periods. (Each Six Months period is taken One Half Yearly Service Unit. For example for 6 years service, there will be 12 six monthly service periods and for 6 years 7 months service there will be 13 six monthly service periods).
2. 16 1/2 x Last Pay Drawn ( means 16.5 times of Last pay drawn)
3. Maximum Ceiling Limit of 12 Lakhs for employees retired on or after 2.6.2014. (As per G.O.MS.No. 6, Finance (HRM.V-Pension) Department dated 11-01-2016 it is currently Rs. 12,00,000/-; Recently amended vide RPS;2015.)

The Least of the above three will be sanctioned as Retirement Gratuity for that Employee.

Retirement Gratuity

This is payable to the retiring Government servant. A minimum of 5 years qualifying service and eligibility to receive service gratuity/pension is essential to get this one time lump sum benefit. Retirement gratuity is calculated @ 1/4th of a months Basic Pay plus Dearness Allowance drawn before retirement for each completed six monthly period of qualifying service. There is no minimum limit for the amount of gratuity. The retirement gratuity payable is 16 times the Basic Pay, subject to a maximum of Rs. 12 lakhs.

Death Gratuity

This is a one-time lump sum benefit payable to the widow/widower or the nominee of a permanent or a quasi-permanent or a temporary Government servant, including CPF beneficiaries, dying in harness. There is no stipulation in regard to any minimum length of service rendered by the deceased employee. Entitlement of death gratuity is regulated as under:

Qualifying Service	Rate
Less than one year	2 times of basic pay
One year or more but less than 5 years	6 times of basic pay
5 years or more but less than 20 years	12 times of basic pay
20 years of more	Half of emoluments for every completed 6 monthly period of qualifying service subject to a maximum of 33 times of emoluments.

Maximum amount of Death Gratuity admissible is Rs. 12 lakhs w.e.f. 11.1.2016.

Service Gratuity

A retiring Government servant will be entitled to receive service gratuity (and not pension) if total qualifying service is less than 10 years. Admissible amount is half months basic pay last drawn for each completed 6 monthly period of qualifying service. There is no minimum or maximum monetary limit on the quantum. This one time lump sum payment is distinct from and is paid over and above the retirement gratuity.

Issue of No Demand Certificate

Dues owed by the retiring employees on account of Licence Fee for Government accommodation, advances, over payment of pay and allowances are required to be assessed by the Head of Office and intimated to the Accounts Officer two months in advance of the date of retirement so that these are recovered from retirement gratuity before payment. For this purpose the Licence Fee for those in occupation of Government accommodation is taken into account up to the end of the permissible period for which accommodation can be retained after retirement under the Rules on normal rent. The recovery of Licence Fee beyond that period is the responsibility of the Directorate of Estates. If, for any reason final dues cannot be assessed on time, then 10% of gratuity is withheld from gratuity.