Salaries and Remuneration Commission(SRC) Chairperson Lyn Mengich at the commission's offices in Nairobi on July 1, 2023, during a press briefing. PHOTO | WILFRED NYANGARESI | NMG
The SRC is expected to engage employing institutions before advising each institution on specific allowances to be merged, renamed, restructured, abolished, or retained.
“There will be not just savings but it will also help us address the issue of harmonisation of pay, equity, and fairness,” SRC Chairperson Lyn Mengich noted.
The engagement with employing institutions will mark the penultimate phase of streamlining of allowances in public service, a multi-year process that started with the review of allowances of State officers.
The terminal phase shall involve the progressive review of allowances and benefits offered through Collective Bargaining Agreements, aligning them to provisions of the public service framework.
Last month, the SRC scrapped retreat and sitting allowances for internal committees and task forces for institutional internal committees.
At the same time, the Commission standardised daily subsistence allowances (DSAs) for local travel while DSAs for foreign travel were unchanged.
The review is centred on addressing multiple factors adding to the national wage bill, including disparity in rates, proportion of basic pay, and payments for factors already compensated for through the basic salary.
The SRC further seeks to address the proliferation of allowances and the various names of allowances.
Across the 2022/23 financial year, the SRC scrapped plenary sitting, ministerial, and taxable car allowance.
The scrapping of the first two has yielded savings of Sh1.7 billion per year, according to the SRC estimates while the elimination of the taxable car allowance has resulted in savings of Sh2.4 billion per year.
The SRC describes allowances as any periodic or one-off pay to public officers over and above basic salary to address specific needs or circumstances of an employee.
Wage bill
According to the SRC, there are about 247 allowances that make up nearly half the wage bill or 48 percent.
The top 20 allowances paid in the public service take up 95 percent of the total expenditure on allowances.
The top five remunerative allowances by the size of expenditure are house, commuter/transport, hardship, police/prison and leave allowances.
Top facilitative allowances are daily subsistence, mileage, and foreign service allowances.
For many decades, public service allowances have remained a headache in the government's pursuit of streamlining the payments and trimming the ever-rising wage bill.
