NPS Retirement Gratuity: Over the years, questions have been raised on whether a government employee can receive more than one gratuity, particularly when a person retires from military service, receives gratuity, and later joins a civil post under the Centre or states.
The Department of Pension and Pensioners’ Welfare (Department of Pension and Pensioners’ Welfare) has issued a fresh clarification to remove confusion around gratuity entitlement under the National Pension System (National Pension System), especially for personnel who served in the military and later joined civil services.
To address these concerns, the DoPPW has referred to Rule 4A of the Central Civil Services (Payment of Gratuity under NPS) Amendment Rules, 2025, and laid down clear conditions.
The clarification, issued through an Office Memorandum dated December 26, 2025, explains whether gratuity drawn for earlier military service impacts gratuity eligibility after re-employment in government service.
When separate gratuity will NOT be allowed
As per the memorandum, a re-employed government servant will not be entitled to a second gratuity if they have already received any of the following for their earlier service:
- Superannuation gratuity
- Retiring gratuity
- Compulsory retirement gratuity
- Compassionate gratuity following dismissal or removal
In such cases, the earlier gratuity is considered final, and no fresh gratuity will be admissible for the subsequent government service.
Exception for PSU and autonomous body employees
However, the rules make an important exception. Employees who were earlier working in an autonomous body or a public sector undertaking (PSU), and later joined government service with proper permission, will remain eligible for gratuity.
In such cases, gratuity for government service can be paid in addition to the gratuity already received from the PSU or autonomous body.
Cap on total gratuity amount
The DoPPW has also clarified the treatment of employees who have served both state and central governments. If an employee avails gratuity separately for state government service and central government service, the total gratuity payable will be capped.
The combined gratuity from both services cannot exceed the amount that would have been admissible had the entire service been rendered under a single government.
What this means for employees
The clarification brings much-needed certainty for defence personnel, re-employed civil servants, and officials with mixed service records. It ensures uniformity, prevents double benefits beyond permissible limits, and aligns gratuity payments under the NPS framework with existing pension rules.
