The government on Wednesday decided to continue with the earlier system of disbursing disability pension for the armed forces personnel in accordance with their demand. The decision was taken at a meeting of the Union Cabinet presided over by Prime Minister Narendra Modi. The armed forces have been pressing for reverting to the percentage-based regime for the disability pension and had opposed the slab-based system conceived by the seventh central pay commission (CPC). The government said the decision will benefit existing and future pensioners of the armed forces and would entail an additional expenditure of approximately Rs 130 crore per annum. The government was under attack from the opposition parties as well as the military establishment over slab-based system following which the matter was referred to the National Anomaly Committee by the ministry of defense. The armed forces felt the new system would result in a reduction in the amount of disability pension for existing as well as future retirees compared to percentage-based disability pension. The government has also agreed in principle to address three major grievances of the armed forces relating to their salary structure including providing pay protection to those getting promotion from the rank of brigadiers. The current system has certain anomalies and some of those promoted to higher ranks lose on the military service pay. After the Union Cabinet meeting, Defence Minister Arun Jaitley stated that the government was also addressing the demand of extending pay matrix from 24 years to 40 years and carrying out rationalization of pay of Lt Colonels and Colonels. Further, the government also approved a modification in the recommendations of the seventh CPC relating to the method of revision of pension of pre-2016 pensioners and family pensioners based on the recommendations of a high-level panel. The decision will benefit over 55 lakh pre-2016 civil and defense pensioners and family pensioners. The modified formulation will entail an additional benefit to the pensioners and an additional expenditure of approximately Rs 5,031 crore for 2016-17. The benefit of the proposed modifications will be available with effect from January 1, 2016, the date of implementation of 7th CPC recommendations. With the increase approved by the Cabinet, the annual pension bill of the central government is likely to be Rs 1,76,071 crore, the government said.