Good news for govt employees! Here’s how PF contribution will change from July

The government has finally made an announcement that the Dearness Allowance (DA) for the central government employees will be put on hold till June 2021 and they will continue to bring in DA on time but it will not be reflected in the salary of employees till June 2021.

The three DAs from January to June 2021 will be restored and they will be added to CGS' salary and it will further increase the monthly PF contribution or PF balance in the long term.

According to the AICPI (All India Consumer Price Index) latest data, a 4 percent DA hike for January to June 2021,  3 percent DA for January to June 2020, and 4 percent DA for July to December 2020 (total 17 percent) can be expected. If the DA is not delayed anymore, then it can go up to 28 percent from 17 percent. 

The rise in DA from 17 percent to 28 percent will further increase the PF contribution and it will also make changes in the employees’ monthly salary.

The 52 lakh central government employees along with 58 lakh retired central government employees or pensioners will also get Dearness Relief (DR) benefit restoration as both DA and DR have been frozen till June 2021.