Hostel Subsidy to Children of Central Government Employees – Eligibility criteria more liberalised now

Those who have admitted their children in Boarding Schools for various reasons must be aware of the changing stand of Government as far as the eligibility criteria for Hostel Subsidy is concerned from time to time

In the original Office Memorandum No: 1201l/03/2008-Estt. (Allowance) dated 02.09.2008 issued by Govt for introduction of Hostel Subsidy of Rs.36,000 per year (later this amount has been enhanced to Rs.45,000 after DA crossed 50%), there is no definition for hostel subsidy except that both hostel subsidy and Children Education Allowance cannot be availed concurrently.

Subsequently in the Office Memorandum No: 12011/03/2008-Estt.(Allowance) dated 11.11.2008 it was clarified that Hostel Subsidy means expenses incurred by the Govt. servant if he has to keep his children in the hostel of a residential school away from the station at which he is posted or is residing. It may include expenses towards boarding, lodging and expenses as detailed in para (e) of the original OM No. 12011/3/2008-
Estt.(Allowance) dt. 2nd Sept, 2008.

Doubts raised on many issues and wrong notion of administration:

Since definition of eligibility of Hostel Subsidy was very vague and many doubts were raised by the administrations which implement this order.

1. Whether hostel subsidy could be allowed in the case of children studying/staying hostel of boarding schools away from place of posting (of the employee) for the purpose of good education yet there are schools available in the place of posting.

2. Whether hostel subsidy could be extended when children are studying/staying in the boarding school which is nearby the place of posting of employee.

Since, there was no clear cut definition in these issues administrative wings in many departments have rejected the claims of employees who had admitted their children in boarding school for the purpose of good education though there are schools available in the place of their posting.

The reason for the rejection of these claims put forth by the administration was if hostel subsidy is applicable only in the case of admission into boarding schools on account of non-availability of schools in the place of posting or employee is under the orders of transfer.

Govt Clarification for these issues:

Transfer Liability:

Later, against the wrong notion of administration that hostel subsidy applies only on transfer grounds, Govt came with a categorical clarification in the compilation of frequently asked questions on CEA published by DOPT to the effect that Hostel Subsidy is reimbursable to all Central Government Employees for keeping their ward in the hostel of a residential school away from the station in which the employee is posted or residing irrespective of any transfer liability.

Place of posting and location of hostel – Eligibility on the basis of Pin Code:

Then Govt came with a clarification in the OM.No: 12011/08/2010-Estt.(AL) dated 30.12.2010 to the effect that for the purpose of hostel subsidy station would be demarcated by the first three digits of PIN code of the area (which indicate a Revenue District) where the Government Servant is posted and/or residing.

Hostel Subsidy on the basis of Pin Code – Difficulty in genuine Cases:

Govt’s clarification for eligibility of hostel subsidy on the basis of Pin Code implied that place of posting and the location of hostel should fall in the different Revenue Districts. However, this clarification caused hardship to many parents as though their children were studying considerably away from their place of posting, they were denied with hostel subsidy as location of the hostel and the place posting fall within same revenue district. This is due to the fact that certain revenue districts are relatively very large for various reasons.

The latest Clarification of Govt in May 2012 (O.M No.12011/07/2011-Estt.(AL) dated 31.05.2012)liberalised the condition of eligibility on the basis of Pin Code:

At last, in May 2012, DOPT has taken a reasonable decision to the effect that the term Hostel Subsidy would mean expenses incurred by the Government servant if he/she keeps his/her children in a hostel of a residential school/institution located beyond a distance of 50 kilometres from his/her residence.

It was also clarified in the same Office Memorandum dated 31.05.2012 that hostel subsidy is not related to transfer liability of the Government servant.

So after issue of clarifications in the Office Memorandum dated 31.05.2012, hostel subsidy has to be allowed if the children of a government employee is studying and staying in a boarding school which is more than 50 km away from the place of working of the employee irrespective other factors such as schools are available in the place of working, the employee is not under any transfer liability etc.

Click here read all the Office Memorandums issued relating to Children Education Allowance so far