CCS (Pension) Rules 1972: The family pension and gratuity would not be reduced if a Central Government Employee dies while receiving reduced pay due to any penalty. According to the latest decision by the Department of Pension and Pensioners’ Welfare (DoPPW), the family pension and death gratuity would be determined basis the notional pay such employee would have been entitled to on the date of death. And such notional pay would be treated as emoluments for calculation of the family pension and death gratuity.
The Department had received several references seeking advice as to how family pension and death gratuity in respect of a Government servant is to be calculated if s/he dies while receiving reduced pay for a specified period of time
Read more on financialexpress.com