Commission blocks allowances gravy train in Parliament

The Salaries and Remuneration Commission (SRC) has released a new pay structure for top government officials, making deep cuts into their take home and putting the State on a firm path to reducing the public wage bill.

The revised pay perks that came into force last Friday are a bold attempt to restore sanity in the way the government pays it workers, including the plugging of the allowances hole that public officials have been using to pockets millions of shillings outside their regular pay.

Kenyans, who have in recent years looked on helplessly as Members of Parliament colluded to increase their pay, will be happy to learn that the Sarah Serem-led commission has tackled head-on the monster of allowances that MPs have used to line their pockets with millions of shillings untaxed.

Ms Serem, who chairs the SRC, said all allowances payable to State officers, including MPs, have been consolidated and capped at 40 per cent of the total remuneration package.

This means that with a starting gross pay of Sh532,500 in their first year of service, MPs’ allowances will amount to not more than Sh213,000 a month plus a special duty allowance of Sh150,000 per month taking the gross monthly pay to Sh895,500. Both salaries and allowances are taxable at the rate of 30 per cent under the new Constitution.

MPs’ pay has been structured to progress steadily in each year of service to a set maximum in the final year of their term – meaning the burden of paying them will rise with every year of service.

“Members of Parliament and all other parliamentary State Officers shall enter the remuneration structure at the minimum point and progress to the maximum over the term period,” the commission said in a statement.

The salaries commission has moved further to stop the MPs from using other avenues to pickpocket the taxpayer with the abolition of all other allowances that have not been specified in the Kenya Gazette notice.   

Ms Serem said the new pay structure is hinged on key factors such as the size of the country’s GDP, the rate of economic growth, the public wage bill that has recently surpassed the globally acceptable threshold and their sustainability in the long term.

“This has not been an enviable task for the commission. We have had to walk a very tight rope in trying to balance between attraction and retention on the one hand and sustainability on the other,” she said

Ms Serem said Kenya was facing a big challenge in the management of the public wage bill that currently stands at Sh458.7 billion or more than half of the country’s total domestic revenues. That also amounts to 30.2 per cent of the total government expenditure or more than 12 per cent of the GDP.

The latest reduction in State officers’ salaries will save additional Sh1.5 billion besides the Sh500 million savings that Ms Serem said the country had saved when she launched the proposed remuneration structure on February 5, 2013.

A steep reduction in the pay perks of top government officials bears the potential of saving the State billions of shillings when the commission gets down to aligning middle and low-cadre employees’ pay perks with those it has set at the top. 

(Read: State officers face pay cut in new salary structure)

The initial phase of public service pay perks review affects 3,670 state officers whose total wage bill currently stands at Sh14.7 billion annually. This is expected to fall by Sh2 billion to Sh12.7 billion when the salaries come into force.

Review of salaries and benefits of other State officers is expected to begin in the next three weeks.

Ms Serem said the commission had relied on the principle of equity in setting the new pay perks, reducing the disparity between the highest paid and lowest paid State officers from 189 per cent to 87 per cent.

Additional work needs to be done to reduce the gap to internationally acceptable standards of 50 per cent, she said.

“We were also alive to the fact that the levels of remuneration set should enable the public service to attract and retain the skills required to execute its functions, recognise productivity and remain accountable to the public,” she said.

Under the new structure, whose long term impact should be to stop the gravy train the public service had become under the old Constitution, the President will take home Sh1,237,500 and progress to a maximum of Sh1,650,000 in the fourth year when it will be due for a review.

The deputy President will earn a basic salary of Sh1,051,875 and progress to Sh1,402,500, while speakers of the National Assembly and the Senate will take home between Sh990,000 and Sh1.32 million.

County governors will enter service on a salary of Sh640,681 and progress to Sh854,241 while their deputies will earn between Sh461,250 and Sh615,000. They will also receive a monthly allowance of Sh80,000 and Sh64,000 respectively.

The Serem commission has also set the salary of the Speaker of the County Assembly and member of the executive committee at the minimum of Sh225,000 up to a maximum of Sh300,000 in the fourth year.

A County Assembly member’s package will be between Sh79,200 and Sh105,600. A Cabinet Secretary, Attorney General, Secretary to the Cabinet and Chief of Defence Forces will earn Sh792,000 per month and progress to Sh1, 056,000 at the end of four years.

Principal Secretaries, Vice Chief of Defence Forces, Commander Kenya Army, Director General National Intelligence Service, and Inspector General of Police will each earn between Sh655, 875 and Sh874, 500 in the next four years.

The commission said new State officers and those currently earning below the total gross minimum remuneration structure shall join the scale at the appropriate level.

Ms Serem, however, opened window of confusion in the transition to the new pay perks with the announcement that State officers whose remuneration and benefits are higher than the newly released perks but were set for the position they are holding before the establishment of SRC shall retain such remuneration unless reviewed by the commission.

The provision appears to offer a window of relief to constitutional office holders such as the Chief Justice, the chair of the IEBC and the Constitution Implementation Commission who faced the danger of taking a pay cut in the middle of their term. 

“State officers whose current remuneration levels fall within the structure shall join the structure at the next immediate progression point,” said Ms Serem. The commission also set other benefits that will be payable to State officers.

MPs and Senators who serve on committees shall be paid a sitting allowance of Sh10,000 per day for chairpersons, Sh8, 000 for vice chairpersons and Sh5, 000 for a member.

The commission set a maximum of four days in a week for such meetings, which will see chairpersons, vice chairpersons and members earn a maximum monthly allowance of Sh160,000, Sh128,000 and Sh80,000 respectively.

Parliamentary State officers will also get other benefits such as accommodation and subsistence allowances, security, mileage and medical allowances which shall be paid at existing rates pending review by the commission.

A gratuity scheme at the rate of 31 per cent of the annual basic pay will be paid to parliamentary State officers at the end of their term and shall not be pensionable.

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