Why poor Kenyans, elderly miss out on welfare stipends

More than 200,000 elderly Kenyans did not receive the government’s cash support payouts in the year ended June 2020 due to underspending and non-allocation of funds, a study shows, exacerbating conditions of those vulnerable in the country.

About Sh5.8 billion of the amount meant for the beneficiaries was not transferred out of Sh25.82 billion recurrent expenditure allocation in the financial year 2019/20.

The National Safety Net Programme (NSNP) had a Sh25.82 billion allocation for cash transfers in the supplementary II budget for the financial year 2019/20 after an additional Sh10 billion that President Uhuru Kenyatta announced in April 2020 to cushion the vulnerable, especially in the urban areas.

This came in the wake of the pandemic that was expected to worsen the living conditions of the old and low-income earners on the loss of jobs and incomes.

The additional cash allocation by the State led to the adjustment of the targeted households from 916,000 to one million poor and vulnerable older persons aged above 65.

According to the study, 233,576 elderly did not receive the funds more than the added 167,000 targets.

“Underspending means that certain targeted beneficiaries may not have been reached. None of the targeted households for the cash transfer programmes, through which the government intended to alleviate the economic effects of the pandemic on the vulnerable, were met,” a report by International Budget Partnership (IBP) Kenya stated.

The State targets orphans and vulnerable children, older persons and persons with severe disabilities in the cash transfers and Hunger Safety Net Programme.

The beneficiaries receive Sh2,000 per month or Sh4,000 bi-monthly while Sh5,400 is paid bi-monthly under Hunger Safety Net Programme households.

The expansion of the fund was meant to increase the funds available in the cash transfer programme and cushion the vulnerable in society after the hit of the pandemic in late March.

The State Department of Social Protection had Sh38.83 billion both in capital and recurrent expenditure in the revised budget, with only Sh31.8 billion had been spent, leaving Sh7.6 billion unspent.

Out of the total allocation, Sh16.7 billion was allocated to elderly persons, Sh7.9 billion for orphans and vulnerable children, and Sh1.2 billion for persons living with severe disabilities.

The report shows 95,184 orphans and vulnerable children and 32,926 people with severe disabilities did not receive the transfers.

In the Social Protection Culture and Recreation Sector Report 2020, the department attributed the unmet target of beneficiaries to “incomplete finalisation of the migration of beneficiaries to the account-based payments, natural attrition and payroll exceptions.”

The cash transfers are meant to improve the economic conditions of vulnerable households, which were existing even before Covid-19.

At least 36.1 percent of the population — 17.1 million Kenyans — live below the international poverty line, according to the Kenya National Bureau of Statistics, indicating high poverty levels, defined as earning less than $1.90 (Sh200) a day.

According to World Bank, there has been poverty decline progress in rural areas but there is stagnant poverty incidence in urban areas, particularly outside Nairobi with growing population and urbanisation.

A research Human Rights Watch conducted in the urban informal settlement areas reported that some of the targeted beneficiaries failed to register because they did not know of the existence of the money while some received only for two months. Others who had registered did not receive any benefits.

Only a small fraction of beneficiaries said they received the cash for the entire authorised period between April-November.

IBP Kenya maintained that the government was not transparent on the full responses to the pandemic, which affected its budget credibility.

“It is imperative for the government to not only set targets, including raising the targets as in the financial year 2019/20 but also to ensure resources are properly utilised and the set targets are met. It may seem unnecessary to set higher targets and increase allocations, especially if the full implementation is not attained,” the report stated.

“One main issue we facing on effects of poor budget absorption is such an emergency. Covid-19 did not bring this challenge, we had serious challenges in implementing our budgets even before Covid-19 reached our borders,” IBP Kenya senior researcher John Kinuthia added.

The programme has been facing challenges, especially the Treasury delay in releasing the funds, increasing the number of those missing out on the monthly stipends.

A policy statement the parliamentary Budget and Appropriations Committee released in March for the financial year 2021/22 cited a Sh4.7 billion deficit for the National Safety Net Programme, underpinning historical challenges with issuing of the stipends to the target beneficiaries.

The MPs also said five priority projects under the Child Welfare Society of Kenya had remained unfunded throughout the financial year ended June 2021.

Some of the centres to serve as rescue centres for children were reported to be nearing completion in Bungoma, Joska, Nanyuki, Isiolo and Murang’a.

A similar report by the Office of Controller of Budget on implementation report for 2019/20 showed that the money on recurrent and development of the State department was not fully disbursed.

POLICY MEASURES

The department received 89.6 percent of exchequer issues for development expenditure and 78.5 percent for recurrent expenditure.

“Cash flow problems are a big part of why some government ministries show low absorption because the money never came in fully in the first place,” Mr Kinuthia added.

The outbreak of the pandemic saw the government impose measures to curb the spread of the coronavirus including partial lockdowns on the first phase, curfews and closure of some businesses.

The measures negatively affected workers in the informal sector, exposing them to harsh economic consequences, even as most have since been lifted.

The Treasury announced policy measures including full income tax relief for employees earning below Sh24,000 a month, the reduction of the pay-as-you-earn rate from 30 to 25 percent and tax relief on pharmaceutical products.

Others included the reduction of charges on mobile money transactions and the suspension of listing of negative credit information of borrowers.

A recent global scorecard on accountability of Covid-19 relief funds by IBP showed that while Parliament worked swiftly instituting policies to respond to the crisis, including a supplementary budget and tax relief measures to cushion citizens from the economic hardships of Covid-19, the implementation of the policies faced hurdles.

“While the government provided adequate macroeconomic and aggregate budget information on the relief package that was introduced, it failed to provide details on how the funding was allocated and spent,” the report stated.