Report of the Committee Funeral Allowance : 7th Pay Commission
Funeral Allowance (Para 8.17.54)
Existing Provision: When death of an employee occurs in peace areas, a funeral allowance of ₹6,000 is granted and mortuary charges are reimbursed in the case of Defence personnel.
Reasons mentioned by 7th CPC for recommending abolition: With the pay raises provided by successive Pay Commissions, this kind of an allowance has lost its meaning.
Ministry of Defence: This allowance may not be discontinued considering the circumstances in which this allowance is granted. The rates may be enhanced by suitable multiplication factor.
Analysis and Recommendations of the Committee:
The Committee is of the view that this cannot be categorized as an allowance as it is not paid to the employee but to the Next of Kin. Para 8.2.3 of the 7th CPC Report also states that „Allowance‟ should be used when it is paid to an individual and if it is paid as an administrative expenditure, it should be referred to as expense or expenditure. Considering the circumstances, continuation of this expenditure by the Government might be necessary. However, instead of calling it Funeral Allowance, it may be renamed as Funeral Expense, and the expenditure on this account, at the existing rate of ₹ 6,000/- and mortuary expenses, may be directly borne by the concerned Unit and reflected in budget and accounts accordingly with further proviso that, whenever necessary, the concerned unit can pay this amount to Next of Kin of the deceased at the applicable rates.