Government likely to restore disability benefits to veterans

The govt accepted the 7th CPC recommendation to calculate disability pension according to a "slab system", based on rank

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.
 

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