DR hike of 3% from July 2026: How much more will OPS and UPS family pensioners receive? Check revised dearness relief
The Union Cabinet has approved a 3-percentage-point increase in Dearness Relief (DR) for central government pensioners, taking the rate from 60% to 63% of basic pension with effect from 1 July 2026.
The announcement came alongside the 3% Dearness Allowance (DA) hike for central government employees on Wednesday. The revision will also benefit eligible family pensioners receiving benefits under the Old Pension Scheme (OPS) and Unified Pension Scheme (UPS).
The increase is intended to help pensioners and their families manage rising living costs. However, the additional amount will vary depending on the basic family pension payable under the respective pension arrangements.
Dearness Relief is an inflation-linked allowance paid to central government pensioners and eligible family pensioners. It is calculated as a percentage of the basic pension or basic family pension.
With the latest revision, eligible beneficiaries will receive DR at 63%, compared with the earlier rate of 60%, from 1 July 2026.
For example, a family pensioner receiving a basic family pension of ₹24,000 currently gets ₹14,400 as DR at 60%. At the revised rate of 63%, the DR will increase to ₹15,120. This translates into an additional ₹720 per month.
Under the Old Pension Scheme (OPS), family pension is calculated at 30% of the deceased employee's last-drawn basic pay, subject to a minimum of ₹9,000 and a maximum of ₹75,000 per month.
Eligibility arises if the government employee dies after completing one year of continuous service. However, there are exceptions for employees who were medically declared fit before appointment. Family pension is also payable to eligible family members of a pensioner who dies after retirement.
For example, if an employee's last-drawn basic pay was ₹80,000, the ordinary family pension would be ₹24,000. At 63% DR, the total monthly payment would increase to ₹39,120, compared with ₹38,400 at the earlier rate. This means an additional ₹720 per month.
Under the Unified Pension Scheme (UPS), approved by the Union Cabinet on 24 August 2024, the eligible family member receives a pension equivalent to 60% of the admissible UPS payout drawn by the deceased subscriber immediately before death. The DR increase also applies to this family payout.
For example, if an employee's admissible UPS payout was ₹40,000, the spouse would receive a basic family payout of ₹24,000. At 60% DR, the monthly amount would be ₹38,400. With DR increasing to 63%, it would rise to ₹39,120, providing an additional ₹720 per month.
The actual UPS payout depends on qualifying service, the subscriber's corpus, and any final withdrawal. Therefore, the employee's last-drawn basic pay alone does not determine the family payout.
Sheetal Goel is a Content Producer at Livemint, where she covers corporate developments, personal finance, business trends, markets, and SEBI-related updates. She focuses on simplifying complex financial concepts and presenting them in a clear, reader-friendly manner, thereby helping audiences better understand investment trends, personal finance, and market developments. Her writing focuses on making finance more accessible to everyday readers while maintaining clarity, accuracy, and relevance. <br><br> She holds a degree in Economics (Hons.) along with an MBA in Finance, which has helped her develop a strong foundation in financial analysis, market understanding, and business reporting. Before joining journalism, she worked with finance and broking firms, where she closely followed market developments, investment strategies, and evolving industry trends. This practical exposure strengthened her understanding of financial markets. She has also written content across multiple formats and platforms, including YouTube, LinkedIn, and Instagram. <br><br> Over time, she has developed expertise in covering market-linked stories, investor-focused topics, and regulatory updates in a simplified yet informative style. She also enjoys reading and listening to Hindi poetry, reflecting her appreciation for literature and creative expression beyond the world of markets and numbers.
Get Latest real-time updates
Catch all the Instant Personal Loan, Business Loan, Business News, Money news, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
HomeMoneyPersonal FinanceDR hike of 3% from July 2026: How much more will OPS and UPS family pensioners receive? Check revised dearness relief
✕
Wait for it…
Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.