Fixed Medical Allowance Extended to UPS-Covered Central Government Employees

In a significant clarification, the Government of India has extended the benefit of Fixed Medical Allowance (FMA) to Central Government employees covered under the Unified Pension Scheme (UPS). The decision was communicated through an Office Memorandum issued by the Department of Pension and Pensioners’ Welfare on March 13, 2026.

Background: Introduction of Unified Pension Scheme

The Ministry of Finance had earlier introduced the Unified Pension Scheme (UPS) as an option under the National Pension System (NPS) for recruits to Central Government civil services with effect from April 1, 2025. Employees covered under NPS were also provided a one-time option to switch to UPS.

Key Clarification on Fixed Medical Allowance

The latest memorandum clarifies that Central Government employees covered under UPS—whether directly or through an option exercised under NPS—will be eligible for the benefit of Fixed Medical Allowance.

This eligibility will be governed by the same terms, conditions, and procedures already laid down in earlier orders issued by the Department of Pension and Pensioners’ Welfare. These include provisions introduced through orders dated December 6, 2023, and subsequent amendments issued on February 7, 2025, which had extended FMA benefits to employees under NPS.

Consultation with Ministries

The decision has been taken in consultation with:

• Department of Expenditure, Ministry of Finance
• Department of Financial Services

Both departments provided inputs through official notes dated January 5, 2026, and March 3, 2026, respectively.

Applicability to Audit and Accounts Department

For personnel serving in the Indian Audit and Accounts Department, the orders have been issued in consultation with the Comptroller and Auditor General of India, as required under Article 148(5) of the Constitution.

What This Means for Employees

With this clarification, employees opting for or covered under the Unified Pension Scheme will now receive Fixed Medical Allowance benefits on par with those under the National Pension System. The move ensures uniformity in medical allowance provisions across pension schemes and removes ambiguity regarding UPS coverage.

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