Gratuity Clarification by DoPPW: What Central Government Employees Should Know

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The Department of Pension & Pensioners’ Welfare (DoPPW) has recently issued two important Office Memorandums (OMs) dated 24 October 2025, providing crucial clarifications on gratuity eligibility and coverage for Central Government employees under the Central Civil Services (Pension) Rules, 2021 and the Central Civil Services (Payment of Gratuity under NPS) Rules, 2021.

These OMs aim to resolve confusion among employees, departments, and other organizations regarding who is eligible for gratuity, especially in cases of resignation and coverage under different administrative setups.

1️⃣ Coverage of Offices for Payment of Gratuity

The first Office Memorandum (F. No. 2/9/2025-P&PW(F)) clarifies that:

The enhanced gratuity ceiling of ₹25 lakhs (increased from ₹20 lakhs via OM dated 30 May 2024) applies only to Central Government Civilian Employees governed by:
- Central Civil Services (Pension) Rules, 2021, and
- Central Civil Services (Payment of Gratuity under National Pension System) Rules, 2021.

However, DoPPW continues to receive queries about whether this applies to PSUs, banks, universities, autonomous bodies, or state governments.

👉 Clarification:
These rules do not apply to such organizations. Each of those entities follows their own service and gratuity regulations, often framed by their respective administrative ministries or departments.

Thus, employees of banks, PSUs, or autonomous bodies must refer to their own governing rules, not the CCS Rules framed by DoPPW.

🗣️ In short, DoPPW governs gratuity policies only for Central Government civil employees — not for other sectors.

2️⃣ Eligibility for Gratuity under NPS on Resignation

The second Office Memorandum (No. 2/8/2025-P&PW(F)) addresses a very common question:

“Is a Central Government employee covered under NPS eligible for gratuity after resignation?”

Key Points from the OM:

Rule 22 of CCS (NPS) Gratuity Rules, 2021 allows retirement gratuity only if an employee has:
- Completed five years of qualifying service, and
- Retired due to superannuation, invalidation, voluntary retirement, or absorption in another government-controlled body.
Rule 17 states that resignation generally results in forfeiture of past service, meaning no gratuity is payable.
However, exceptions exist:
- If the resignation is technical (submitted to take up another government post with permission), then gratuity may be retained.
- Similarly, absorption in a PSU or government body under Rule 32 is treated as deemed retirement, making the employee eligible for gratuity.

👉 In summary:
A Central Government employee who resigns normally (without taking another government job) is not eligible for gratuity under the NPS-related CCS Rules. Only those retiring, invalidated, or absorbed elsewhere with permission can claim it.

Why These Clarifications Matter

These OMs bring greater transparency and policy consistency across departments. Over the past year, numerous RTIs and employee representations were filed seeking clarity on:

Whether PSUs or autonomous institutions fall under DoPPW’s gratuity rules, and
Whether resignation before superannuation under NPS leads to loss of gratuity benefits.

Now, with these official clarifications, there’s no ambiguity left — making it easier for HR sections, pension cells, and employees to understand their rightful benefits.

📎 Download the Official Letters (PDF)

You can view or download the official OMs issued by the Department of Pension & Pensioners’ Welfare below:

Bottom Line

The Department of Pension & Pensioners’ Welfare has once again stepped up to clear doubts on gratuity coverage and eligibility under the CCS Pension and NPS frameworks.

If you’re a Central Government employee, it’s crucial to understand under which rules you are covered — as your entitlement to gratuity depends entirely on it.

💡 Stay tuned to GovtJobPerks.com for more updates on pension, gratuity, and the upcoming 8th Pay Commission.