The government has introduced a fully automated system for disbursing Fixed Medical Allowance (FMA) to National Pension System (NPS) beneficiaries, removing the requirement to submit medical bills and helping reduce payment delays. The move is expected to reduce paperwork and make it easier for elderly beneficiaries to receive their dues on time. 

According to an Office Memorandum issued by the Finance Ministry on April 16, 2026, eligible NPS pensioners will now receive their medical allowance directly in their bank accounts without having to submit bills or reimbursement claims. This marks a major shift from the earlier system, where beneficiaries often had to deal with procedural delays. 

The memorandum says, “The payment of FMA to eligible NPS pensioners/family pensioners shall be disbursed by the Pension Disbursing Banks through their Central Pension Processing Centres (CPPCs).” 

It also clarifies, “The payment of FMA will be automatic and no bill is required to be submitted by the beneficiary. The CPPC will strictly follow the instructions mentioned in the Special Seal Authority issued by the CPAO for payment of FMA and any other orders issued by the Government on the subject.” 

How the new payment process will work 

In practical terms, this means pensioners will no longer have to go through a complicated claim process. Once the Central Pension Accounting Office (CPAO) verifies a beneficiary’s eligibility, it will issue a Special Seal Authority (SSA) to the concerned bank. Based on this authorisation, the bank’s Central Pension Processing Centre will credit the allowance directly into the pensioner’s account. 

The memorandum adds, “The CPPC of the authorized bank, after receiving the Special Seal Authority for payment of FMA from CPAO, will credit the amount of FMA at the rate notified from time to time by the DoP&PW in respect of these beneficiaries in their bank account on quarterly basis as per schedule…” 

The Finance Ministry has reiterated that the payment process will be fully automatic. “The payment of FMA will be automatic and no bill is required to be submitted by the beneficiary,” it noted. 

Annual life certificate still mandatory 

However, beneficiaries will still need to complete one annual compliance requirement. Pensioners receiving FMA must submit their life certificate every year in November in either digital or physical form. The memorandum says, “The person drawing FMA shall submit the life certificate (digital or physical) every year in November…” 

Failure to submit the life certificate may impact payments from December onward. 

Option to switch to CGHS facility 

The memorandum also gives pensioners the flexibility to switch from FMA to the Central Government Health Scheme (CGHS) outpatient facility if they choose. In such cases, the applicable government rules governing CGHS will apply. 

If a pensioner changes their bank or branch, the transfer of payments will continue under existing CPAO guidelines, ensuring continuity in disbursement. 

Rules for family pensioners after death of beneficiary 

The revised rules also make it easier for family pensioners to continue receiving benefits after the death of a pensioner. If the eligible family member’s name is already recorded in official records, they can apply directly to the bank with the death certificate to begin receiving FMA. If the name is not on record, a fresh authorisation must be obtained through the concerned office. 

Banks will initially disburse the allowance and later seek reimbursement from the government under the current system. As the memorandum states, “The amount of FMA disbursed… will be reimbursed by the Government to the banks.” 

The reform is aimed at making the system more pensioner-friendly by ensuring faster payments, reducing administrative hurdles, and improving access to benefits for retirees and their families. For many elderly pensioners, especially those who faced difficulties under the older claim-based system, the changes are likely to bring major relief.