A fresh order from BSNL Corporate Office has settled a question that thousands of retired employees and their families have been asking for over a year. And for family pensioners, the answer is disappointing.
On 1 July 2026, the BSNL Pension Section circulated a Department of Telecommunications (DoT) Office Memorandum that makes one thing crystal clear: the notional increment benefit that helps boost pension will not be extended to family pension. If you were expecting this benefit to flow to your family after your service, this order is worth reading carefully.
Let me break down what this means in plain language.
What Is a Notional Increment, and Why Does It Matter?
Here's the situation that started it all. Government employees earn their annual increment on 1 July or 1 January. But an employee who retires on 30 June or 31 December — literally a day before the increment is due — misses out entirely. That one missing increment shrinks their pension for the rest of their life.
For years this felt unfair, and the courts agreed. The Madras High Court first allowed a notional increment for pension calculation back in 2017. The issue climbed all the way to the Supreme Court, which through its judgment dated 11 April 2023 and later orders in 2024 and 2025 directed the government to grant this one notional increment purely for calculating pension.
So a "notional" increment means the increment is added on paper — only to work out a fairer pension — even though the employee never actually drew that salary.
What the New BSNL Order of 1 July 2026 Says
The BSNL memo forwards a DoT Office Memorandum (No. 40-05/2026-Pen(T) dated 17.06.2026) and delivers a firm clarification. Here is the heart of it.
The benefit of notional increment granted through DoPT orders dated 14.10.2024 and 20.05.2025, and the DoT order dated 26.05.2025, is admissible only for calculation and revision of pension. It shall not be extended for fixation or revision of family pension.
In simple terms: the retired employee's own pension can include this notional increment. But once the pension converts to a family pension — paid to the spouse or dependent after the pensioner passes away — this benefit does not carry over.
Why Is Family Pension Being Treated Differently?
This is the question most readers will have. The logic comes straight from how the Supreme Court framed its directions.
The court specifically said the notional increment is to be reckoned only for calculating the pension admissible, and not for any other pensionary benefits. Family pension is treated as a separate category of pensionary benefit. Since neither the Supreme Court nor DoPT issued any separate instruction extending the benefit to family pension, departments have concluded that it simply cannot be applied there.
DoPT, when asked directly about this in 2026, repeated that its earlier orders were issued to comply with the Supreme Court and that no fresh clarification widening the scope has been issued. In the absence of any order saying "yes, extend it," the default position is "no."
Who Is Affected by This Order?
This clarification touches several groups:
Family pensioners of BSNL and DoT retirees who hoped the notional increment would raise their monthly family pension will not see any increase on this ground.
Serving employees planning their retirement finances should note that while their own pension benefits from the notional increment, the family pension figure their dependents eventually receive is calculated without it.
Other departments too — the Department of Posts issued a nearly identical clarification in June 2026 — which shows this is a government-wide position, not something specific to BSNL alone.
What This Means for Your Pension Planning
If you are a Central Government or PSU pensioner, the takeaway is straightforward. Your own basic pension can legally include the one notional increment if you retired on 30 June or 31 December after fulfilling the qualifying service and conduct conditions. That part stands and is worth claiming if you haven't already.
But do not build your family's future financial planning assuming this increment will lift the family pension. As things stand in mid-2026, it will not.
To understand exactly how your pension is calculated — with or without the notional increment — you can use the pension and salary tools on CGSeva. Plugging in your actual figures gives you a far clearer picture than trying to estimate it by hand.
Could This Change in the Future?
It's possible. This entire benefit exists today only because of sustained legal challenges that went up to the Supreme Court. Retired employees' associations may well take the family pension question to court on the argument that it is unfair to treat the two differently.
If a future court ruling or a fresh DoPT order specifically extends the benefit, the position could reverse. But until that happens, government departments are bound by the current clarification, and the answer for family pension remains no.