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Friday, November 20, 2015

7th Pay Commission Report for Children Education Allowance (CEA)

7th Pay Commission Report for Children Education Allowance (CEA)


8.17.11 CEA is paid to government employees to take care of schooling and hostel requirements of their children. The rates of CEA are double for a differently abled child.

8.17.12 Many demands have been received regarding CEA. It has been requested that the amount be suitably raised and CEA should be extended for Graduation/Post Graduation level studies also. The Commission has received an overwhelming number of requests for simplification of the procedure for reimbursement.

Analysis and Recommendations

8.17.13 Before VI CPC recommendations, the scheme was known as Children Education Assistance and provided at the following rates:


Component
Class I-X
Class XI-XII
Requirement
Reimbursement of Tuition
Fee (₹ pm)
40
50
-
Reimbursement of Tuition
Fee for Disabled and mentally
retarded children (₹ pm)
100
100
-
Children Education
Allowance (₹ pm)
100
100
In case the government employee is compelled to send his child to a school away from the Station of his posting
Hostel Subsidy (₹pm)
300
300
In case the employee is obliged to keep his children in a hostel away from the Station of his posting and residence on
Account of transfer.

8.17.14 The VI CPC rationalized the structure to the following:-

Component
Present Rates
Remarks
CEA
₹ 1500 pm
Whenever DA increases by 50% CEA shall increase by 25%
Hostel Subsidy
₹ 4500 pm
Whenever DA increases by 50% Hostel Subsidy shall increase by 25%

8.17.15 Effectively a 10-fold rise was given by VI CPC. This has led to high expectations, and consequently, vast number of demands for increasing the rates, expansion of scope and simplification for procedure of reimbursement of this allowance.

8.17.16 The various issues are examined seriatim:

  • Has CEA kept pace with time? Presently CEA goes up by 25 percent each time DA increases by 50 percent. Thus, since DA currently stands at 113 percent, CEA has gone up by 50 percent from its 2008 level. As against this, the movement of the All India Education Index33 is shown below:



The above chart shows that between 2008 and 2013, the Education Index has gone up from 134 to 154, i.e., by 14.9 percent, whereas CEA went up by 25 percent w.e.f. 01.01.2011 (when DA exceeded 50 percent). Thus, it can be concluded that increase in CEA has kept pace with (and in fact exceeded) the cost of education.

  • What is the adequate level of compensation? Given the wide range of educational institutions, and the varying fee structure, the question of adequacy depends upon many factors. On the one hand we have government institutions like Kendriya Vidyalayas that charge fees to the tune of ₹1,000 per month (including Vidyalaya Vikas Nidhi) and on the other hand there are private institutions where the monthly fee varies from ₹5,000 to ₹25,000 (or even more) per month.


8.17.17 On the whole, the Commission is of the view that quantum of CEA should be calibrated in such a manner that the main objective is met without the government entering into the field of subsidizing private education. Hence, taking into account the various items of expenditure that are reimbursed as a part of this allowance, the following is recommended:

Component
Recommended Rate
Remarks
CEA (₹ pm)
1500 x 1.5 =2250
Whenever DA increases by 50%, CEA shall increase by 25%
Hostel Subsidy (₹ pm)
4500 x 1.5 = 6750
Whenever DA increases by 50%, Hostel Subsidy shall increase by 25%

The allowance will continue to be double for differently abled children.
  • What should be the scope of CEA? Presently CEA is payable up to Class XII. There is a strong demand for increasing the scope to Graduate and Post Graduate studies. However, due to the greatly varying nature of studies at the graduate level and beyond, the extension of scope of the allowance beyond Class XII cannot be accepted.



Simplification of Procedure for Reimbursement. This is a major area of concern. Many representations have been received by the Commission wherein employees have stated that due to cumbersome procedures, reimbursement has been held up for years. Another issue is the kind of voucher which will be accepted and which kind of voucher will not. The issue has been examined, and the apprehensions expressed are not without merit. It is recommended that reimbursement should be done just once a year, after completion of the financial year (which for most schools coincides with the Academic year). For CEA, a certificate from the head of institution where the ward of government employee studies should be sufficient for this purpose. The certificate should confirm that the child studied in the school during the previous academic year. For Hostel Subsidy, a similar certificate from the head of institution should suffice, with the additional requirement that the certificate should mention the amount of expenditure incurred by the government servant towards lodging and boarding in the residential complex. The amount of expenditure mentioned, or the ceiling as mentioned in the table above, whichever is lower, shall be paid to the employee.

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