Every pensioner is eligible to commute a portion of his pension (excluding Personal Pension) for a lump sum payment i.e. commuted value of pension. All kind of pensioners getting Service pension, Invalid Pension, Disability pension, War injury pension etc are eligible to get Commtation of pension. In family pension, there is no provision of commutation of pension.
The portion of pension as specified below may be commuted based on the findings of Release Medical Examination (RME) or Release Medical Board (RMB)/Invaliding Medical Board (IMB) given in the Longevity Certificate without undergoing a further medical examination, provided, it is applied for, within one year of the date of retirement. Thereafter, commutation is subject to being declared fit by a Commutation Medical Board, and these findings will be taken into account for commutation purposes.
One third of basic pension in case of Civilian Pensioner prior to 1.1.96,
40% w.e.f. 1.1.96.
43% of basic pension in case of Commissioned Officer.
Prior to 1.1.2006 and 50% wef 1.1.2006
45% of basic pension in case of Personnel below Officer Rank. Prior to 1.1.2006 and 50% wef 1.1.2006
The reduction in the amount of pension on commutation will become operative from the date of receipt of the commuted value by the pensioner or at the end of three months after issue of authority for payment, whichever is earlier. If the pension is drawn through Bank, the reduction in pension becomes operative from the date of credit of the amount in the Bank Account. If the pensioner has applied before the date of retirement and commutation is notified concurrently with the pension it is to be reduced from the date/month of commencement of pension.
The commuted portion of pension will be restored by the PDA after completion of 15 years as follow without wanting for any formal application from pensioner:-
(a) Where the commuted portion of pension, i.e., commuted value has been notified jointly, the commuted amount should be restored after 15 years from the date of retirement.
(b) In all other cases, where commutation led to a reduction in pension in the second or subsequent month, 15 years will be reckoned from the date of reduction of the amount of pension.
Cases Where Commutation is not admissible
Where the applicant feels that the medical authority while refusing commutation on medical grounds or making addition of years to his actual age has committed an error of judgment, he shall be eligible for second medical examination, provided he makes an appeal within one month of the receipt of medical report from the medical authority.
In case the pensioner has been refused commutation on medical grounds or if he, having once declined to accept commutation on the basis of addition of years to his actual age, recommended by the medical authority, applies for a second medical examination, such medical examination will be held after one year of the first medical examination.
After 15 Years stop deduction from Pension due to Commutation
Your commutated value is awarded with a condition that the commuted portion of pension will be deducted from your pension every month up to 15 Years and automatically it will be stooped after 15 Years. If pension disbursing authority fails to stop commutation deduction, you should contact them and if then no result, just file a complaint in PG Portal.
No deduction of Commuted portion of pension from family Pension
Deduction on account of commutation is not permitted from Family Pension. In the event of demise of pensioner, the family pension will get full amount of family pension. No amount should be deducted from her family pension.