SRC braces for battle with MPs over housing allowances

The Salaries and Remuneration Commission (SRC) wants members of Parliament compelled to return to Kenyans the hefty house allowance paid to them, which the agency has termed irregular, in what promises to be a gruelling court battle.

The decision by the Parliamentary Service Commission (PSC) to award MPs and senators a monthly house allowance of Ksh250,000, backdated to October last year, sparked outrage by Kenyans who condemned the leaders’ greed.

Kenyan MPs are among the highest paid in the world, with a salary of Sh621,250 and hefty perks including a medical cover of Sh10 million (inpatient) and Sh300,000 (outpatient) and a car loan of Sh7 million at only three per cent interest.

In addition, they enjoy a Sh20 million mortgage taxed at only three per cent a year.

COURT RULING

On Wednesday, SRC chairperson Lyn Mengich said the commission, the only state body constitutionally mandated to review the salaries and allowances of state and public officers as contained in the July 7, 2017 gazette notice, would move to court to challenge the house allowance.

The July 2017 notice detailed new salary cuts, as well as slashed and abolished allowances for state and public officers, in a move it said was to save the taxpayer Sh8.8 billion annually.

However, two high court rulings of October and December 2018 declared some parts of the SRC gazette notice of July 2017 unconstitutional.

The SRC failed to get stay orders against the ruling which invalidated parts of the July gazette notice, pending the hearing and determination of its appeal.

STATE OFFICERS

Defending the award, National Assembly Speaker Justin Muturi, who also chairs the PSC, said: “The recent PSC determination to provide a housing benefit to MPs was well guided by Justice Chacha Mwita’s ruling of October 5, 2018, which established that state officers qualify for this benefit.”

He added: “It is a matter of fact that MPs are state officers and it would be unfair to be prejudiced against them.”

Ms Mengich said any payment of house allowance outside the gross pay of any state or public officer is unconstitutional.

She noted that MPs just like other state and public officers enjoy a housing allowance, which is part of their gross pay, and that allowing them to get away with the allowance would amount to double payment.

“The commission has taken steps to ensure that all payments that do not have the SRC approval are stopped. The commission will take legal action to stop any payment that has not been set or advised and recover such allowances,” she said.

ELIGIBILITY

The National Assembly Speaker has argued that other state officers, such as Cabinet secretaries, judges, governors and their deputies, principal secretaries and members of constitutional commissions and independent offices are entitled to a house allowance among other perks.

Ms Mengich confirmed that the hearing for stay orders is set for this month.

She added that the commission has not set any house allowance for state officers in the Executive, county governments, Parliament, Judiciary and constitutional commissions and independent offices outside the July gazette notice, noting that officers in these institutions are only entitled to a gross pay that includes basic salary and allowances.

She clarified that only the president, the deputy president, governors and deputy governors are entitled to a housing benefit for the state functions they perform.

WAGE BILL

According to the SRC remuneration structure, MPs were the biggest losers as they were to take a reduction in basic salary and lost five allowances including a Sh5 million car grant that would later be restored.

In the 2017/18 financial year, Kenya’s public wage bill stood at about Sh733 billion, about 50 per cent of the country’s total revenue at the time.

This, according to the commission, exceeds the limit stipulated in the Public Finance Management (PFM) Act, which provides that the expenditure on the wage bill should not exceed 35 per cent of total revenue.