Financial Assistance for Contract Employees in Punjab Who Die in Service: Eligibility and Rates

1.Quick Answer

The family of a Punjab contract employee who dies in service is eligible for a lump-sum financial assistance grant if the employee was recruited under National Pay Scales against a regular post. Under the S&GAD notification dated 19.04.2019, the grant ranges from Rs 1,600,000 for BPS 1–4 to Rs 4,000,000 for BPS 20 and above.
These rates are lower than the current rates for civil servants (Rs 3,000,000 to Rs 7,000,000), because the revisions of December 2023 and February 2024 were notified for civil servants only. You can check the amount for any BPS and date of death with the Punjab Financial Assistance Calculator by selecting the contract employee option.

2.Which Contract Employees Are Eligible?

The S&GAD (Regulations Wing) notification dated 16.06.2021 states that the revised financial assistance benefits notified on 19.04.2019 extend only to contract employees who were recruited under National Pay Scales against regular posts. In simple terms, two conditions must both be met:

• the employee was paid in a National Pay Scale (BPS), not a special or fixed pay package; and
• the employee was appointed against a regular post, not a post in a project or a time-bound activity.

3.Which Contract Employees Are Not Covered?

Under the same notification, the financial assistance package does not extend to:

• employees on posts in a project, programme, Project Management Unit or Project Management Office;
• employees appointed for a time-bound (one-time) development activity;
  work-charged employees;
• employees on daily wages;
• contingent-paid staff;
• contract employees appointed on a special pay package; and
• contract employees appointed on a fixed pay package.

If you are not sure which category a post falls in, check the appointment order: it states whether the appointment is against a regular post and whether the pay is in a National Pay Scale or a fixed package.

4.How the Contract-Employee Rates Were Fixed

Financial assistance for contract employees comes from the Contract Appointment Policy 2004 and a series of S&GAD notifications, not from the Finance Department's civil-servant package. The key documents are:

• Contract Appointment Policy 2004, Para 3(XIII-A): provides guidance on financial assistance to the family of a contract employee who dies while in service.
• 13.02.2009 — S&GAD notification No.DS(O&M)5-3/2004/Contract(MF): the original notification on financial assistance for contract employees. Before 2019, the lump-sum rates were Rs 0.40 million (BPS 1–4) to Rs 2.00 million (BPS 20 and above).
• 19.04.2019 — S&GAD notification No.SO(ERB)(S&GAD)5-8/2016/Finance: the Chief Minister approved a revised package for contract employees in terms of the Finance Department's letter dated 15.08.2017. The lump-sum rates were raised to Rs 1.6 million (BPS 1–4) to Rs 4.0 million (BPS 20 and above).
• 16.06.2021 — S&GAD notification of the same number: the revised benefits of 19.04.2019 extend only to contract employees recruited under National Pay Scales against regular posts.

4.1.Position confirmed for contract educators in 2024

On 24.09.2024, the School Education Department asked the S&GAD Regulations Wing about financial assistance for deceased contract educators. The Regulations Wing replied that Para 3(XIII-A) of the Contract Appointment Policy 2004 provides complete guidance on the matter, and directed the department to proceed under its latest policy notification dated 16.06.2021. This means contract educators recruited under National Pay Scales against regular posts are covered by the contract-employee package.

5.Civil Servant vs Contract Employee: Key Differences

• Source of entitlement: civil servants are covered by the Finance Department's package dated 15.08.2017, as revised; contract employees by the Contract Appointment Policy 2004 and S&GAD notifications dated 19.04.2019 and 16.06.2021.
• Current lump-sum grant: Rs 3.0 million to Rs 7.0 million for civil servants (deaths on or after 10.01.2024); Rs 1.6 million to Rs 4.0 million for contract employees.
• Revisions of 2023 and 2024: notified for civil servants; no notification on record extends them to contract employees.
• Family salary through an OSD post: provided for civil servants under the Finance Department's letter dated 19.08.2024; the contract-employee notification of 19.04.2019 does not provide for it.
• Distribution among heirs: the Finance Department's clarification dated 10.12.2025 was issued for civil servants; for contract employees, the department decides the payment to the legal heirs.
• Other benefits: the 19.04.2019 notification revises only the lump-sum grant. Any other benefit depends on Para 3(XIII-A) of the Contract Appointment Policy 2004 and the terms of the contract.

6.Worked Examples

6.1.Example 1: Contract teacher in BPS-16

A contract teacher recruited in BPS-16 against a regular post dies on 5 March 2026. The family is eligible for a lump-sum grant of Rs 2,500,000 under the S&GAD notification dated 19.04.2019. A regular BPS-16 civil servant dying on the same date would be entitled to Rs 4,500,000.

6.2.Example 2: Contract employee in BPS-9 who died in December 2023

A contract employee in BPS-9, appointed against a regular post, dies on 15 December 2023. The grant is Rs 1,900,000. The higher rate of Rs 7,500,000 notified for deaths from 21.11.2023 to 09.01.2024 applied to civil servants only.

6.3.Example 3: Employee in a project on a fixed pay package

An employee working in a Project Management Unit on a fixed monthly package dies in 2025. The family is not covered by the financial assistance package, because the S&GAD notification dated 16.06.2021 excludes project posts and fixed pay packages.

7.What If the Employee Had Been Regularised?

If a contract employee had been regularised before death, he or she was a civil servant on the date of death. In that case, the Finance Department's civil-servant package applies, including the current lump-sum rates and the family salary through an OSD post. The date of regularisation in the official order is therefore important, and the family should confirm it with the department.

8.What Should the Family Do?

Check the appointment order to confirm that the post was a regular post and the pay was in a National Pay Scale.
Check whether the employee was regularised before the date of death, as the civil-servant package would then apply.
Apply to the office or department where the deceased was working, referring to the S&GAD notifications dated 19.04.2019 and 16.06.2021, and, for contract educators, the S&GAD letter dated 24.09.2024.
Confirm the admissible amount and the payment to legal heirs with the department, as the final sanction rests with the competent authority.

9.Official Notifications

The S&GAD notifications referred to in this guide are available to view and download on the Punjab Financial Assistance Calculator page, under Official Documents:

S&GAD notification No.SO(ERB)(S&GAD)5-8/2016/Finance dated 19.04.2019 — revised financial assistance package for contract employees
S&GAD notification No.SO(ERB)(S&GAD)5-8/2016/Finance dated 16.06.2021 — scope limited to National Pay Scale contract employees on regular posts (enclosed with the letter dated 24.09.2024)
S&GAD letter No.SO(ERB)S&GAD/5-19/2024/SED-07 dated 24.09.2024 — financial assistance for deceased contract educators.

For civil servants, see our guide on financial assistance for Punjab civil servants who die in service.