Government likely to restore disability benefits to veterans

Facing severe criticism from serving soldiers, veterans and civilians alike for slashing the military’s disability pensions, top government officials tell Business Standard they are reviewing the decision and could soon roll back at least some cuts.

 

As business-standard.com reported (Click here to read the story) the government issued a notification on September 30 --- a day after announcing the army’s successful strikes on terrorist camps in Pakistan-occupied Kashmir --- that slashed allowances that soldiers receive for injuries/disabilities that are attributable to military service, or aggravated by it.

 

ALSO READ: Top army doctor complains that generals manipulate disability pensions

In that notification the government accepted the recommendation of the 7th Central Pay Commission (7th CPC) to calculate disability pension according to a “slab system”, based on rank. This significantly reduces disability pensions for the army, compared with the “percentage system” instituted by the 6th CPC.
 

The government first reacted by claiming (through “government sources” cited by several newspapers) that disability pensions had actually been increased, not cut.

 

Thereafter, the government backtracked on October 13, announcing that it had referred the decision on disability pensions to a committee for review.

 

Said a government statement: “Service Headquarters have represented that the percentage-based system should be continued under the 7th CPC for calculating disability pension for defence services at par with their civilian counterparts. The Ministry has referred the representation of the Service Headquarters to the Anomaly Committee of the 7th CPC for consideration”.

 

A senior government official told Business Standard: “We are not wedded to any position. We want to ensure that disabled soldiers do not suffer. If our review finds that the earlier ‘percentage based’ system was more beneficial than the ‘slab system’ that has now been implemented, we will revert to the earlier system.”

 

A partial or complete revocation of the “slab system” by the Anomalies Committee would have to be also cleared by the cabinet.

 

With the Prime Minister’s Office (PMO) itself spearheading this re-evaluation, the Director General of Defence Accounts (DGDA) has been asked for detailed figures to justify its earlier contention that the “slab based” system would benefit a larger number of disabled veterans --- something the army flatly denies.

 

Earlier, the DGDA had incorrectly stated that more than 85 per cent of soldiers drawing disability pensions would benefit from the new “slab system”. Now it is telling the government that about half of all disabled pensioners would benefit.

 

The army strongly rebuts those figures. Its detailed calculations suggest that 90-95 per cent of all disabled pensioners stand to lose by the new system (see chart).

 

Army’s calculations

 

Until the September 30 notification, any officer or soldier who suffered 100 per cent disability that was “attributable to military service, or aggravated by military service” would get 30 per cent of his/her last pay drawn as disability pension. In addition, they would draw a “service component” of pension, which amounted to 50 per cent of their last pay drawn.

 

Under the new rules, which come into effect retrospectively from January 1, 2016, the “service component” remains unchanged, but a “slab system” has been introduced for disability pension --- Rs 27,000 per month for officers, 17,000 for junior commissioned officers (JCOs), and Rs 12,000 for other ranks (ORs).

 

The army calculates that only those soldiers would benefit who are invalided out in the early stages of their careers --- a small minority. Those who have served a few years, and all those who have earned pensions, would lose financially.

 

As evident from the chart, the new system would only benefit those jawans whose pay at the time of release from service is less than Rs 40,000 [Rs 34,800 (basic pay) + Rs 5,200 (military service pay, or MSP)] under the 7th CPC. At higher pay grades, 30 per cent disability pension would amount to more than Rs 12,000.

 

Very few jawans retire before serving 15 years, when they become eligible for pension. Most retire after at least 17-19 years, which they have signed up for. By that time, they have been automatically promoted to Naik (two stripes), and their emoluments are Rs 41,100 (Rs 35,900 + Rs 5,200 MSP).

 

Most jawans actually attain the rank of Havildar (three stripes), which means they are eligible for 26 years of service, and a pay grade of Rs 50,100 (Rs 44,900 + Rs 5,200).  

 

Hence most retirees at the jawan level (except those rare cases who are invalided out early in their careers) earn well above the level below which the slab system yields greater benefits. They, therefore, stand to benefit from the percentage system.

 

Similarly, JCOs would only benefit from the slab system if their pay grade at retirement is below Rs 56,200 [Rs 51,000 + Rs 5,200 (MSP)]. Above that grade, the disability pension of 30 per cent would be greater than the slab rate of Rs 17,000. In fact, most JCOs start retiring as Subedars, with 28 years of service, when their pay grade is Rs 57,200 (Rs 52,000 + Rs 5,200).

 

Calculating similarly, commissioned officers only benefit from the slab system if their pay at release is less than Rs 90,000 [Rs 74,500 + Rs 15,500 (MSP)]. That is because 30 per cent of any pay grade above this would be greater than the slab rate of Rs 27,000. At seven years of service, officers pay grade rises above that level. Most officers retire after 20 years of service, when they become eligible for pension.

 

The army askes: if the “slab system” was indeed beneficial for lower ranks, why hasn’t it been made applicable to other services like the Central Armed Police Forces (CAPFs)? In fact, there is no demand from CAPFs for extending the slab system to them.

 

With the military strongly arguing for a reversion to the “percentage system” of calculation, all eyes are now on the Anomalies Committee.

Disability pensions: who wins, who loses?
Disability Pension calculation : Enlisted personnel
Rank Service (in years) Old Basic Pay + Grade Pay 7 CPC factor 7 CPC amount (in Rs) 7 CPC salary (according to fixation tables) Military Service Pay (MSP) Reckonable Emolument (RE) Disability Element for 100% Disability component of pension Slab Amt for 100% Disability Loss per month (Rs)
Sepoy

 
16 13,560 2.57 34,849.2 35,300 5,200 40,500 0.3 12,150 12,000 150
17 13,970 2.57 35,902.9 37,000 5,200 42,200 0.3 12,660 12,000 660
18 14,280 2.57 36,699.6 37,000 5,200 42,200 0.3 12,660 12,000 660
19 14,310 2.57 36,776.7 37,000 5,200 42,200 0.3 12,660 12,000 660
 
Naik          22 14,640 2.57 37,624.8 38,100 5,200 43,300 0.3 12,990 12,000 990
23 15,160 2.57 38,961.2 39,200 5,200 44,400 0.3 13,320 12,000 1,320
24 16,610 2.57 42,687.7 43,600 5,200 48,800 0.3 14,640 12,000 2,640
 
Havildar 24 17,460 2.57 44,872.2 44,900 5,200 50,100 0.3 15,030 12,000 3,030
25 17,980 2.57 46,208.6 47,600 5,200 52,800 0.3 15,840 12,000 3,840
26 18,520 2.57 47,596.4 47,600 5,200 52,800 0.3 15,840 12,000 3,840

Disability Pension calculation: Junior Commissioned Officers (JCOs)
Rank Service (in years) Old Basic Pay + Grade Pay 7 CPC factor 7 CPC amount (in Rs) 7 CPC salary (according to fixation tables) Military Service Pay (MSP) Reckonable Emoluments (RE) Disability Element for 100% Disability component of pension Slab Amt for 100% Disability Loss per month (Rs)
Naib Subedar 27 19,080 2.57 49,035.6 50,500 5,200 55,700 0.3 16,710 17,000 -290
28 19,650 2.57 50,500.5 52,000 5',200 57,200 0.3 17,160 17,000 160
 
Subedar 28 20,660 2.57 53,096.2 53,600 5,200 58,800 0.3 17,640 17,000 640
29 21,280 2.57 54,689.6 55,200    5,200 60,400 0.3 18,120 17,000 1,120
30 21,890 2.57 56,257.3 56,900 5,200 62,100 0.3 18,630 17,000 1,630
 
Subedar Major    31 23,430 2.57 60,215.1 60,400    5,200 65,600   0.3 19,680 17,000 2,680
32 24,130 2.57 62,014.1 62,200 5,200 67,400 0.3 20,220 17,000 3.220
33 24,850 2.57 63864.5 64,100 5,200 69,300 0.3 20,790 17,000 3,790
34 25,600 2.57 65,792 66,000 5,200 71,200 0.3 21,360 17,000,, 4,360

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel