Navigating Subsistence Allowance Rules for Suspended Central Govt. Employees: What Are Your Thoughts?

Dear Experts,

An employee in an organization that falls under the central government service rule was suspended pending disciplinary action from 28.11.2017 for the charges leveled against him. He was awarded the punishment of withholding 2 years' increment (not cumulative effect) for the proven misconducts leveled against him after due process of disciplinary proceedings. He was allowed to resume work from 10.10.2018. He was paid a subsistence allowance during his suspended period. Now, the VII Pay Commission was approved in the year 2020 by the central government, taking effect from 01.01.2016, and the monetary effect was from October 2017. The arrears of salary as per the VII Pay Commission to the employees were paid out in March 2021 along with the salary. Now, in this issue, my queries are:

1. Whether the suspended employee should be paid the difference in subsistence allowance after the effect of the VII Pay Commission recommendation, as the suspended employee was paid SA under the VI Pay Commission recommendation?

2. When the charges leveled against him were proven in the inquiry and specific punishment was awarded, does the management have the right (1) to recover the subsistence allowance paid to the employee for the period he was kept under suspension pending disciplinary action, or to adjust the said suspension period in the balance of earned leave days credit, or treat it as leave on loss of pay on the grounds that he was not on duty during the suspended period?

3. Are there any specific rules prevailing in Central Govt. payment of subsistence allowance referring to query no.2?

Request experts' views, please.

Thanks & regards,
V Sridhar

The answer to your queries is as follows:

Suspension and Subsistence Allowance

1. The employee was suspended on 28.11.2017. The financial effect of the VIIth Pay Commission was given effect from October 2017. So, on the date of suspension, the suspended employee was already receiving wages as per the VIIth Pay Commission. Therefore, the subsistence allowance has to be paid based on the revised salary. Moreover, on 28.11.2017, the VIth Pay Commission scales were not in existence, so the clock cannot be turned back for this purpose.

Meaning and Purpose of Subsistence Allowance

2. The term 'Subsistence Allowance' means it is intended for the subsistence of the employee as well as their family. It is not an ex-gratia or a discretionary amount. It is an essential payment made to an employee, and there cannot be any recovery or adjustment with leave due, even if the charges are proven and punishment as per rules is imposed. The right of suspension is given to the employer, but the suspended employee is still an employee of the organization. The employer has decided to keep the employee away from the workplace for reasons well known, but during the suspension, the employee is to be paid subsistence allowance for the frugal existence of the employee and their family.

Central Government Rules on Subsistence Allowance

3. An extract of the Central Government Rules is given below:

THE ALL INDIA SERVICES (DISCIPLINE AND APPEAL) RULES, 1969

Subsistence allowance during suspension: A member of the Service under suspension or deemed to have been placed under suspension by the Government concerned shall be entitled to receive from that Government:
- a subsistence allowance at an amount equal to the leave salary which a member of the Service would have drawn if they had been on leave on half-average pay or on half pay and, in addition, dearness allowance, if admissible on the basis of such leave salary;
- any other compensatory allowance admissible from time to time on the basis of pay of which a member of the Service was in receipt on the date of suspension, subject to the fulfillment of other conditions laid down for the drawal of such allowance.

No member of the Service shall be entitled to receive payment under sub-rule (1) unless they furnish a certificate that they are not engaged in any other employment, business, profession, or vocation. The authority to grant subsistence allowance shall be the suspending authority. Similar provision exists in The Central Civil Services (Classification, Control & Appeal) Rules, 1965.