Thiruvananthapuram: Salaries of a majority of Kerala state government employees will be delayed at the start of the New Year following confusion over the last-minute rollback of the Medisep premium hike.

The delay was triggered after the government withdrew its earlier order to raise the Medisep health insurance premium from ₹500 to ₹810 with effect from December. Under the revised directive, the enhanced premium will now be deducted from salaries paid in February, while the December salary is to carry the old deduction of ₹500.

Based on the initial order, offices across the state had already prepared salary bills with the higher Medisep deduction of ₹810 and submitted them to treasuries well in advance to ensure timely disbursement in the New Year. However, fresh instructions issued late on Tuesday directed that salaries be processed at the old premium rate, forcing treasuries to return all submitted bills.

As a result, departments were required to cancel the existing bills and generate revised salary bills, leading to congestion in the SPARK salary management system. Officials said the system slowed significantly as offices attempted to reprocess bills simultaneously, with preparation times stretching to 10–12 hours per bill.

Most departments were unable to submit revised salary bills to treasuries by Wednesday evening, the last working day of December. Generally, employees of the Secretariat, Police, Fire and Rescue Services and courts receive their salaries on the first working day of the month, followed by teachers and Health Department staff on the second day, and other departments on the third.

With Mannam Jayanti being observed on Friday, employees scheduled to receive salaries on the first working day are now expected to be paid only by Saturday, with subsequent delays likely for other departments.

The first phase of the Medisep scheme concluded on December 31, and the second phase was originally slated to begin on January 1 with a premium of ₹810. However, citing delays in completing technical procedures, the government decided to extend the first phase until January 31 and allocated ₹61.14 crore to cover one month’s premium contribution.

The last-minute decision-making contributed significantly to the salary disruption, affecting thousands of state government employees.