Government likely to restore disability benefits to veterans

By Ajai Shukla

Business Standard, 18th Oct 16

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 this newspaper reported (October 10, “While ‘surgical strikes’ were under way, govt cut Army’s disability pensions”) 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 7^th Central Pay Commission (7^th 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 6^th 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.

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
Sepoy	16	13,560	2.57	34849.2	35,300	5200	40500	0.3	12150	12,000	150
	17	13,970	2.57	35902.9	37,000	5200	42200	0.3	12660	12,000	660
	18	14,280	2.57	36699.6	37,000	5200	42200	0.3	12660	12,000	660
	19	14,310	2.57	36776.7	37,000	5200	42200	0.3	12660	12,000	660
Naik	22	14,640	2.57	37624.8	38,100	5200	43300	0.3	12990	12,000	990
	23	15,160	2.57	38961.2	39,200	5200	44400	0.3	13320	12,000	1320
	24	16,610	2.57	42687.7	43,600	5200	48800	0.3	14640	12,000	2640
Havildar	24	17,460	2.57	44872.2	44,900	5200	50100	0.3	15030	12,000	3030
	25	17,980	2.57	46208.6	47,600	5200	52800	0.3	15840	12,000	3840
	26	18,520	2.57	47596.4	47,600	5200	52800	0.3	15840	12,000	3840

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).

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
Naib Subedar	27	19,080	2.57	49035.6	50,500	5200	55700	0.3	16710	17,000	-290
	28	19,650	2.57	50500.5	52,000	5200	57200	0.3	17160	17,000	160
Subedar	28	20,660	2.57	53096.2	53,600	5200	58800	0.3	17640	17,000	640
	29	21,280	2.57	54689.6	55,200	5200	60400	0.3	18120	17,000	1120
	30	21,890	2.57	56257.3	56,900	5200	62100	0.3	18630	17,000	1630
Subedar Major	31	23,430	2.57	60215.1	60,400	5200	65600	0.3	19680	17,000	2680
	32	24,130	2.57	62014.1	62,200	5200	67400	0.3	20220	17,000	3220
	33	24,850	2.57	63864.5	64,100	5200	69300	0.3	20790	17,000	3790
	34	25,600	2.57	65792	66,000	5200	71200	0.3	21360	17,000	4360

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.

Disability Pension Calculation : Officers
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	Rank
Lt	1	21,000	2.57	53970	56,100	15,500	71600	0.3	21480	27,000	-5520
	2	21,630	2.57	55589.1	56,100	15,500	71600	0.3	21480	27,000	-5520
				0
Capt	3	24,360	2.57	62605.2	63,100	15,500	78600	0.3	23580	27,000	-3420
	4	25,850	2.57	66434.5	67,000	15,500	82500	0.3	24750	27,000	-2250
	5	26,630	2.57	68439.1	69,000	15,500	84500	0.3	25350	27,000	-1650
Maj	6	27,130	2.57	69724.1	71,500	15,500	87000	0.3	26100	27,000	-900
	7	28,770	2.57	73938.9	75,800	15,500	91300	0.3	27390	27,000	390	All Officers from 7 th year of Service will lose
	8	29,640	2.57	76174.8	78,100	15,500	93600	0.3	28080	27,000	1080
	9	30,530	2.57	78462.1	80,400	15,500	95900	0.3	28770	27,000	1770
	10	31,900	2.57	81983	82,800	15,500	98300	0.3	29490	27,000	2490
	11	33,830	2.57	86943.1	87,900	15,500	103400	0.3	31020	27,000	4020
	12	34,850	2.57	89564.5	90,500	15,500	106000	0.3	31800	27,000	4800
Lt Col	13	45,400	2.57	116678	1,16,700	15,500	132200	0.3	39660	27,000	12660
	14	46,770	2.57	120198.9	1,20,200	15,500	135700	0.3	40710	27,000	13710
Col	15	51,840	2.57	133228.8	1,33,400	15,500	148900	0.3	44670	27,000	17670
Brig	29	69,180	2.57	177792.6	1,82,200	15,500	197700	0.3	59310	27,000	32310
Maj Gen	34	77,000	2.57	197890	1,99,600	0	199600	0.3	59880	27,000	32880
Lt Gen	36	79,000	2.57	203030	2,05,100	0	205100	0.3	61530	27,000	34530
Lt Gen	37.5	80,000	2.57	205600	2,11,600	0	211600	0.3	63480	27,000	36480	HAG +
Lt Gen	39	80,000			2,25,000	0	225000	0.3	67500	27,000	40500	APEX

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.