The long-standing demand of central government employees and pensioners regarding the 18 months of Dearness Allowance (DA) and Dearness Relief (DR) arrears has once again come into focus. While regular DA hikes have resumed after the pandemic, employees are still awaiting clarity on the unpaid arrears from January 2020 to June 2021. Let’s look at what the government has officially said and what to expect in the coming months.
Background: Why 18 Months of DA Arrears Were Stopped
In 2020, during the COVID-19 pandemic, the Government of India decided to freeze three consecutive DA and DR instalments—effective January 2020, July 2020, and January 2021—as part of fiscal management measures.
While the freeze helped balance the government’s pandemic-related spending, it affected over 48 lakh central government employees and 67 lakh pensioners, whose DA/DR payments were withheld for nearly 18 months. The freeze officially ended in July 2021, when DA was restored and increased from 17% to 28%.
Latest Update: Will the 18-Month Arrears Be Paid?
According to the Ministry of Finance, there is no proposal currently under consideration to release the pending DA/DR arrears for the frozen 18-month period.
In a written reply to Parliament, the government clarified that the arrears “cannot be released due to fiscal constraints and budgetary impact” arising from the pandemic. This means that employees and pensioners will continue to receive current DA increases, but the unpaid arrears between January 2020 and June 2021 remain non-payable.
Current DA Rate and New Hike from November 2025
While the arrears are not being restored, the good news is that DA rates continue to rise twice a year based on the All India Consumer Price Index (AICPI).
As of November 2025, the DA rate has been increased from 55% to 58%, providing a modest salary boost for central employees. Similarly, DR for pensioners has also been revised by 3 percentage points, benefiting retirees across India. (Cabinet Update)
State governments like Uttar Pradesh and Haryana have also implemented similar hikes for their employees and pensioners. (7th Pay Commission Report)
Why the Government Denied Arrears Payment
The government has cited several key reasons for not releasing the arrears:
- The total estimated payout would exceed ₹40,000 crore, putting heavy pressure on the fiscal budget.
- Pandemic-related expenditures and welfare schemes already created large financial obligations.
- The government prioritized resuming current DA/DR payments and regular increments rather than retroactive arrears.
However, employee unions have continued to request reconsideration, arguing that the withheld arrears represent a legitimate due for work already completed.
What Central Employees Should Know
- Arrears for Jan 2020 – Jun 2021 remain unpaid, and the government has no active plan to release them.
- DA and DR hikes continue regularly every six months as per AICPI data.
- Next DA revision is expected in March 2026, based on upcoming inflation figures.
- Employees are advised to verify updated DA components in their payslips to ensure correct calculations.
- Pensioners should check DR updates through the Pension Portal or CPAO notifications.
Expected Future Developments
While it’s unlikely that the 18-month arrears will be released, there could be indirect relief through:
- 8th Pay Commission recommendations, which may include a fitment factor hike or retrospective salary adjustment from January 2026.
- Continued DA increases twice a year, helping offset inflationary pressures for both employees and pensioners.
Employee unions may still press the Finance Ministry to consider a one-time compensation package, though there is no official proposal at present.
Conclusion: As of November 2025, the 18-month DA arrears for central government employees remain unpaid, with the government reiterating that there are no plans to release them. However, regular DA revisions and the upcoming 8th Pay Commission reforms promise financial relief ahead. Employees and pensioners are advised to stay updated through official circulars and Ministry of Finance notifications for any future policy changes.
Disclaimer: This article is based on official statements and financial reports available as of November 2025. The government’s stance on DA arrears and related payments may change based on future fiscal reviews or Pay Commission recommendations. Readers should verify updates on the official Ministry of Finance and DoPT websites.