Hi, I would like to know the difference between the Dearness allowance and Special Allowance? Both are same or different?
From India, Mumbai
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From India, Mumbai
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Dear Kavita Dhage,
You are from Mumbai, it seems. In Maharashtra, Special Allowance denotes Dearness Allowance. Both are the same. In other States, Special Allowance is not a Dearness Allowance. Dearness Allowance (or Special Allowance in Maharashtra) is paid to mitigate the impact of inflation or the cost of living.
From India, Mumbai
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209You are from Mumbai, it seems. In Maharashtra, Special Allowance denotes Dearness Allowance. Both are the same. In other States, Special Allowance is not a Dearness Allowance. Dearness Allowance (or Special Allowance in Maharashtra) is paid to mitigate the impact of inflation or the cost of living.
From India, Mumbai
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Dear Kavita,
I have no idea about the practice in Maharashtra as referred to by Akhil. Special allowance, if paid in addition to basic and other allowances, by the very name, is an allowance payable in respect of a certain peculiar nature in the performance of the job. As such, it is different from the dearness allowance, the purpose of which is to neutralize the effect of a periodical rise in the general price level. In the absence of any factual reason for the inclusion of special allowance as a component in the wage structure, it has to be considered as part of the basic wages.
From India, Salem
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I have no idea about the practice in Maharashtra as referred to by Akhil. Special allowance, if paid in addition to basic and other allowances, by the very name, is an allowance payable in respect of a certain peculiar nature in the performance of the job. As such, it is different from the dearness allowance, the purpose of which is to neutralize the effect of a periodical rise in the general price level. In the absence of any factual reason for the inclusion of special allowance as a component in the wage structure, it has to be considered as part of the basic wages.
From India, Salem
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Dear Umakanthan Sir,
I would like to draw your kind attention to the section 4 (1) (i) which is given verbatim as under:
"4. (1) Any minimum rate of wages fixed or revised by the appropriate government in respect of scheduled employments under section 3 may consist of –
(i) a basic rate of wages and a special allowance at a rate to be adjusted at such intervals and in such manner as the appropriate government may direct to accord as nearly as practicable with the variation in the cost of living index number applicable to such workers (hereinafter referred to as the "cost of living allowance");"
I am also attaching herewith one latest notification by GOM revising minimum rates of wages of one of the schedule industries. In this notification you will find in Appendix thereto written Special Allowance (hereinafter referred to as "the cost of living allowance"). It there in every such notification.
Hope this will suffice what I said in my post #2 above.
From India, Mumbai
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I would like to draw your kind attention to the section 4 (1) (i) which is given verbatim as under:
"4. (1) Any minimum rate of wages fixed or revised by the appropriate government in respect of scheduled employments under section 3 may consist of –
(i) a basic rate of wages and a special allowance at a rate to be adjusted at such intervals and in such manner as the appropriate government may direct to accord as nearly as practicable with the variation in the cost of living index number applicable to such workers (hereinafter referred to as the "cost of living allowance");"
I am also attaching herewith one latest notification by GOM revising minimum rates of wages of one of the schedule industries. In this notification you will find in Appendix thereto written Special Allowance (hereinafter referred to as "the cost of living allowance"). It there in every such notification.
Hope this will suffice what I said in my post #2 above.
From India, Mumbai
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Dear Madam,
Under the Minimum Wages Act/Rules in Maharashtra, Special Allowance is the same as Dearness Allowance. Dearness Allowance, either statutorily given or voluntarily paid by the employers through wage agreements, has come to be paid to neutralize the erosion of basic wages (purchasing power) caused by the rise in the cost of living.
When, by all means, it is dearness allowance, it is understandable why the Government of Maharashtra has chosen to call it by the nomenclature of Special Allowance, which is a misfit and misleading.
Regards,
Vinayak Nagarkar
HR and Employee Relations Consultant
From India, Mumbai
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Under the Minimum Wages Act/Rules in Maharashtra, Special Allowance is the same as Dearness Allowance. Dearness Allowance, either statutorily given or voluntarily paid by the employers through wage agreements, has come to be paid to neutralize the erosion of basic wages (purchasing power) caused by the rise in the cost of living.
When, by all means, it is dearness allowance, it is understandable why the Government of Maharashtra has chosen to call it by the nomenclature of Special Allowance, which is a misfit and misleading.
Regards,
Vinayak Nagarkar
HR and Employee Relations Consultant
From India, Mumbai
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Perhaps Section 4(1) of the Minimum Wages Act, 1948 as cited by Akhil uses the term "special allowance" only to describe the otherwise commonly called dearness allowance in contrast with other allowances which may be included in the wage structure. The Maharashtra Government simply adopted the terminology of the section - that's all.
Kavita's question also arises from the Maharashtra Government's usage only. Therefore, going by the standard use of the term "special allowance" elsewhere, ordinarily, special allowance is different from dearness allowance and one cannot be substituted for the other, particularly in respect of calculations like gratuity, lay-off compensation, etc.
From India, Salem
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Kavita's question also arises from the Maharashtra Government's usage only. Therefore, going by the standard use of the term "special allowance" elsewhere, ordinarily, special allowance is different from dearness allowance and one cannot be substituted for the other, particularly in respect of calculations like gratuity, lay-off compensation, etc.
From India, Salem
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Continuing what has been described by learned member Mr. Umakanthan, some more aspects also distinguish Dearness Allowance (generally followed in government & quasi-government establishments, industrial/mining sectors) from Special Allowance. For instance, we shall take note of the recent judgment of the Supreme Court on the treatment of Special Allowance while calculating EPF deductions. I'm sure it's part of basic wages.
Likewise, most of the industrial undertakings, banks, etc., adopt the system of Fixed DA + Variable DA, which are periodically revised directly linking with CPI/WPI. The Fixed DA gets subsumed either partly or fully when wage settlement agreements are drawn. I'm not sure whether the Maharashtra mechanism undergoes such an exercise.
Whereas there are some practices to pay Special Allowance to employees posted in remote areas, projects, offshore posts, airways, on special assignments, rescue operations during calamities, operating below ground, on difficult terrains, etc. These are not payable to all across the board and used to be irregular, specific for such duties/days.
From India, Bangalore
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Likewise, most of the industrial undertakings, banks, etc., adopt the system of Fixed DA + Variable DA, which are periodically revised directly linking with CPI/WPI. The Fixed DA gets subsumed either partly or fully when wage settlement agreements are drawn. I'm not sure whether the Maharashtra mechanism undergoes such an exercise.
Whereas there are some practices to pay Special Allowance to employees posted in remote areas, projects, offshore posts, airways, on special assignments, rescue operations during calamities, operating below ground, on difficult terrains, etc. These are not payable to all across the board and used to be irregular, specific for such duties/days.
From India, Bangalore
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