The winter session of Parliament is set to begin from December 1, and central government employees are eagerly awaiting clarity from the government on the confusion surrounding the ToR of the 8th Pay Commission earlier this month. Apart from the ToR confusion, employees also want to know whether there will be changes in DA (Dearness Allowance) and DR (Dearness Relief) in the January 2026 cycle. All these concerns and confusion are arising because the 10-year cycle of the 7th Central Pay Commission is ending on December 31, 2025, which means the next DA/DR revision will be the first outside the current Pay Commission cycle. The 8th Pay Commission, for which work is in progress, will submit a report on pay and pension revisions in 18 months from now.
Meanwhile, the alleged discrepancies in the 8th Pay Commission’s TOR, the government’s silence on the issue and the completely different trends seen in the actions of previous Pay Commissions have created confusion among 1.2 crore employees and pensioners. Let us also tell you what is the whole matter…
Employees unhappy with ToR of 8th Pay Commission
Soon after the government notified the ToR of the 8th Pay Commission, the staff side of the National Council of Joint Consultative Mechanism (NC-JCM) which represents central government employees in formal discussions with the government and several employee unions have objected to the missing points in the document. He says that many of his major demands have been left out, even though he had already presented a brief demand list. The biggest complaint is the absence of pension revision in the ToR for existing pensioners and family pensioners, due to which there is widespread disappointment among the pensioners.
The unions allege that there are many long-standing anomalies related to pay fixation, pension, minimum wage and fitment formula. They want that 50 percent DA/DR should be merged with the basic pay or pension, along with 20 percent interim relief should also be given from January 1, 2026. They are also demanding restoration of the old pension scheme by abolishing NPS/UPS, release of DA/DR arrears of the 18-month pandemic period and removal of the 5 per cent cap on compassionate appointments.
Adding to the frustration of employees, the government has not yet responded to ToR concerns. However, some MPs have raised questions on these ToR issues with the government, so the employees are hopeful that the central government will give a clarification when the Parliament session begins on December 1.
Root of confusion: What will happen after December 31, 2025?
The 7th Pay Commission cycle ends on 31 December 2025. The Eighth Pay Commission has been given 18 months time to complete its report and submit it to the government. Once the report is submitted, it will take at least 6 months for it to be approved by the Cabinet and implemented for pay and pension revision.
In previous commissions, implementation usually took 6-12 months after report submission. Looking at past trends, this means that the final implementation of the 8th Pay Commission may happen only by the end of 2027 or early 2028.
Here are two key questions that have raised concerns among employees:
Will the pay and pension revisions be applicable retrospectively from January 1, 2026?
Will the increase in dearness allowance stop after December 2025 after the end of the 7th Pay Commission cycle?
Answers to both questions are available here. Will the 8th Pay Commission be implemented retrospectively? The answer in the pages of history is yes. Employees fear that the implementation date is not specific in the TOR, so the government cannot implement the new pay structure from January 1, 2026. However, past trends provide strong assurance of this.
The 7th Pay Commission got cabinet approval in June 2016. Due to which this commission came into effect retrospectively from January 1, 2016. If we talk about the Sixth Pay Commission, the Cabinet’s approval was received in August 2008. This commission was implemented retrospectively from January 1, 2006. Despite the delay, each Commission maintained the 10-year revision cycle and provided dues to the employees by the due date. According to this logic, the Eighth Pay Commission – irrespective of when it is finally implemented – should be effective from January 1, 2026.
Will dearness allowance not increase until the Eighth Pay Commission is implemented?
This is the biggest question among employees today. The next dearness allowance cycle will start from January 2026. Since the announcement of dearness allowance for January-June is made every year around March, the revision will take place only after the completion of the tenure of the Seventh Pay Commission. But the important thing is that there is no policy or precedent to stop dearness allowance because the pay commission cycle is over.
After each pay commission, even after the tenure of the previous commission ended, dearness allowance continued uninterrupted. Until the recommendations of the next Pay Commission were implemented, dearness allowance continued to increase twice a year.
After the implementation of the new pay structure, the existing dearness allowance was merged into the basic pay and dearness allowance resumed at 0 per cent. The same thing happened during the transition from 5th → 6th Pay Commission and 6th → 7th Pay Commission.
So, what will happen this time?
The increase in dearness allowance will continue twice a year (January and July). It will be calculated on the basis of the basic pay of the current 7th Pay Commission. Only after the implementation of the 8th Pay Commission, the accumulated dearness allowance will be merged into the new basic pay and will start again from zero. Therefore, there is no basis to assume that dearness allowance will be stopped. Unless the government issues a new order (which is highly unlikely), the DA increase will continue as before. At present, the DA of central employees is 58 percent of the basic pay after an increase of 3 percent in the last revision.
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