7th CPC recommendations to reduce House Rent Allowance

7th CPC recommendations to reduce House Rent Allowance

The 7th Central Pay Commission has been recommended to reduce the percentage of House Rent Allowance for all categories of Central Government employees rationalized to 24 percent, 16 percent and 8 percent of the Basic Pay for Class X, Y and Z cities respectively.

The Commission also recommends that the rate of HRA will be revised to 27 percent, 18 percent and 9 percent when DA crosses 50 percent, and further revised to 30 percent, 20 percent and 10 percent when DA crosses 100 percent.

House Rent Allowance for Central Government Employees

“HRA is a compensation for expenses in connection with the rent of the residential accommodation to be hired/leased by the employee and is graded based on the level of the employee”

HRA paid from 2008 @ 30% for X (population of 50 lakh & above), 20% for Y (5 to 50 lakh) and 10% for Z (below 5 lakh) category of cities as per 6th CPC Recommendations. Now, 7th CPC has recommended reduction in the existing rates to 24% for X, 16% for Y and 8% for Z category of cities.

The rates of HRA will not be less than Rs.5400/-, 3600/- & 1800/- at X, Y & Z class cities respectively.

The rates of HRA will be revised to 27%, 18% and 9% for X, Y & Z class cities respectively when Dearness Allowance (DA) corsses 25 percent and further revised to 30%, 20% and 10% when DA corsses 50%.

Special orders on continuance of HRA at Delhi ‘X’ class city) rates to Central Government employees posted at Faridabad, Ghaziabad, Noida and Gurgaon, at Jalandhar (‘Y’ class city) rates to Jalandhar Cantt. at “Y” class city rates to Shillong, Goa & Port Blair and HRA at par with Chandigarh (‘Y’ class city) to Panchkula, S.A.S. Nagar(Mohali)

The allowances relating to CILQ. FAA and SNLQ henceforth stand abolished as a separate allowance. Eligible employees to be governed by the newly proposed provisions for Housing for Personnel Below Officers Rank (PBORs)

NPA & MSP: Add-ons like NPA, MSP, etc. should not be included while working out HRA [Para 8.7.16 of 7th CPC Report