State starts recovery of MPs' Sh2.7bn illegal house allowance

Parliament has begun deducting monies from MPs pay to recover the Sh2.7 billion house allowances that the courts declared was illegally paid to the lawmakers.

With only seven months to the general election, Parliament is in a race against time to recover the cash, amid uncertainties about their re-election. 

The courts declared the house allowances were already included in lawmakers' salaries and must be refunded to the government. 

National Assembly clerk Michael Sialai told the Star on Tuesday  the deductions are huge but did not elaborate or describe the range of repayments.

“I can confirm we started the recovery in December and it will be so until such a time the full amount is recovered,” he said.

“It is a lot of money. We have just made arrangements to ensure that recoveries are made,” Sialai added.

“We are appealing [the court ruling] but the court did not give us an injunction on the particular matter of the recoveries.”

The Parliamentary Service Commission in April 2019 decided  to implement Sh250,000 monthly allowance to enable MPs to rent houses within Nairobi, and the same was backdated to August 2018.

For the 26 months to December 2020 — when the High Court ordered a stop to the payments, each of the 416 lawmakers had earned approximately Sh6.5 million.

Factoring in the remaining period to the August polls, the amount per month comes to more than  Sh900,000 for every MP who collected the house allowance. 

However, a number of members said they had received only about Sh1.5 million by the time payment was halted by the courts.

They hold that the monthly recoverable amounts could come to between Sh150,000 and Sh200,000 and not the widely discussed Sh900,000.

Some highly placed parliamentary sources aware of the intrigues said the deductions could about Sh400,000 or even half a million on the higher side.

Most of the MPs interviewed, however, did not disclose the amounts being deducted, arguing they were yet to collect their payslips – and intend to do so on Wednesday during the special sittings.

We got an official communication saying there is little that can be done to salvage the situation unless there were fresh orders for a stay on the deductions

“Whoever is speaking of Sh6.5 million is lying. The total was about Sh1.5 million for one year. That means the deduction could be like Sh150,000 per month since you can’t deduct the tax on the allowance,” Minority leader John Mbadi said.

A number of lawmakers told the Star of the difficulties they stand to face in the wake of the hefty demands they are facing during the electioneering period.

They say the deductions will subject them to 'pain and untold suffering' as they stand to strain their net earnings a great deal.

Worse, those unable to meet the monthly cuts would have to go home with a smaller gratuity.

“We got an official communication saying there is little that can be done to salvage the situation unless there were fresh orders for a stay on the deductions,” an MP from Machakos county said.

“I haven’t checked my payslip to see if the deductions have kicked off. The majority of members have nothing to be deducted,” another MP said.

Mwala MP Vincent Musau, without revealing how much was deducted from his December pay, said, “Some of us never look at those payslips.”

Ndaragwa MP Jeremiah Kioni said, “Those who collected have already suffered the chopping…I am also going to repay…I will pay without complaining but in a very painful manner.”

“It is a very difficult time to repay those huge debts. With elections coming, it is very dangerous. It can be the end of your ability to win another election,” the CIOC chairman added.

Nominated MP David Sankok said, “We are law-abiding citizens. I am comfortable with it in respect of the court ruling. I have not seen my payslip but we were told it will be deducted.”

“I rarely check my payslip. A circular said from December they will deduct the whole amount they gave us. It was about Sh1.2 million,” Sankok said.

The Salaries and Remuneration Commission and activist Okiya Omtatah moved to court saying the PSC secretly paid MPs Sh250,000 monthly allowance.

At least 98 per cent of MPs in both the National Assembly and Senate were paid the house allowance, escalating the House’s row with the SRC.

SRC had opposed the allowance saying it would cost the taxpayer an average of Sh1.2 billion annually further arguing that the PSC ignored the Treasury advisory on the move.

The commission’s take was that housing benefit is extended to certain state officers by nature of their work that requires hosting state functions.

But Parliament argued that housing allowance falls under the "services and facilities", which is within its mandate and not that of the SRC.

The Parliamentary Service Commission lost the case as it was consolidated before Justices Wanjiru Karanja, Gatembu Kairu and Jamila Mohammed.

The court found out that though the decision of PSC was in good faith, the commission has no such powers.

It ruled that PSC recovers in full from December 2020 to December 2021 but the PSC moved to the appellate court.

On December 3, the Court of Appeal declined to issue a stay order.  The full hearing is slated for February 20.

The SRC, in a separate plan already in motion, has proposed an increment of MPs pay by Sh88,000 per month, and an upward review of a number of perks.

(Edited by V. Graham)