The Treasury has rejected Parliament’s bid to offer former MPs who retired between 1984 and 2001 a lump sum of Sh2.7 billion and a monthly lifetime pay of at least Sh100, 000, terming the payment illegal.
Through the Leader of Majority in the National Assembly Aden Duale, the government said the Bill proposing the juicy perks was illegal because Parliament had failed to consult the Treasury in line Section 114 of the Constitution.
The article demands that any “money Bill” or a proposed change to the law that concerns taxation or government spending must come for debate to Parliament after taking into account the views of the Treasury.
Mr Duale said that the Treasury was left out in the Bill sponsored by Minority Leader John Mbadi and which last week received the support of the National Assembly’s Finance and National Planning Committee.
“I will be moving a motion to withdraw the Bill. This is because the committee did not take into account the Treasury’s views in approving the privately sponsored Bill,” Mr Duale said on Wednesday.
“This is a money Bill that has financial implications on the government," Mr Duale said, adding that the Bill should have been considered by the Budget and Appropriations Committee (BAC) before it was introduced in the House.
In the Bill’s proposals, about 290 former MPs would have seen their pension entitlement raised to a minimum Sh100, 000 per month for life, up from the current average of Sh33, 000.
Another 80 former MPs, who had been excluded from pension, would also have receive the payout aimed at lifting them out of poverty and putting them at par with lawmakers who served after 2002 and who receive at least Sh120, 000 monthly.
Of the 290 former lawmakers, 130 of them are dead and their dependents would have been entitled to about half of the monthly pay.
The committee had sweetened the deal and recommended that the monthly payout be backdated to January 2010, meaning a lump sum of Sh100, 000 monthly for 119 months to date.
"This is a lot of public money and the Treasury’s views should have been taken into account by the Finance committee, which it didn’t. I will be moving a motion that the Bill be stood down," Mr Duale said.
Parliament’s Budget Office had estimated that if the Bill passed the 290 former MPs would have received a lump sum of Sh1.76 billion or an average of Sh6 million each.
The remaining 80 would get a single payment of Sh11.9 million to date and the Sh100, 000 monthly for life, pushing the total lump sum to Sh2.7 billion.
The Budget Office, the fiscal and economic think-tank that advises MPs on budgetary matters, had estimated that if enacted into law, the monthly cost of sustaining the former MPs would have risen to Sh15.075 million per month or Sh180.9 million annually.
It says the costing and assessment of the financial implications of the Bill were performed based on the assumption that there were currently about 160 former MPs entitled to the proposed pension and about 130 widows/widowers.
If Mr Duale fails to stop debate on the Bill, Parliament will vote on the committee’s recommendations on a date to be determined. The measure will then be forwarded to the President for assent to make it law and commit taxpayers to the pension payments.