Reality check! It will cost taxpayer Sh10 billion for new MPs, MCAs house allowance

It will cost the taxpayer in excess of Sh10 billion to finance the house allowance for MPs and MCAs in the next five years.

This is way above the cost of the plenary sitting allowance that was abolished.

The house allowance is a new benefit for the MPs and MCAs that was introduced by the Salaries and Remuneration Commission (SRC) in a gazette notice of July 28, 2022.

The gazette notice that took effect on August 9, 2022 abolished the plenary sitting allowance for MPs and MCAs.

SRC chairperson Lyn Mengich said that the decision to abolish the Sh5,000 plenary sitting allowance for MPs and Sh3,000 for MCAs, will save the country Sh8.2 billion in the next five years.

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“An MP at the national and county level discharges their role through plenary sittings. If you are then paid an allowance for the plenary sitting and you are still getting a full time pay it amounts to double compensation,” said Ms Mengich.

An MP takes home a monthly gross pay of Sh710,000 as per the SRC notice of July 2022 with an MCA pocketing Sh144,375 in monthly gross pay.

Ms Mengich says that in arriving at the decision to abolish the plenary sittings “we looked at the pay for state officers.”

“We looked at the pay of the state officers from equity and fairness, which is equal pay for work of equal value. It is what we used to evaluate all the jobs and determine relative job worth for all the state officers in the executive and legislature at the national and county levels,” the SRC chairperson said.

According to Ms Mengich, abolishing the plenary sitting allowances for MPs will save the taxpayer Sh450 million a year and Sh2.2 billion for the five-year period.

The savings from the MCAs will be Sh1.2 billion annually and Sh6 billion for the five-year period they are in office.

“The Sh8.2 billion is a huge saving to the taxpayer,” Ms Mengich says.

National revenue

The Public Finance Management (PFM) Act bars the government against spending more than 35 percent of national revenue on wages.

The reason for this is so as to release resources for service delivery and development. Currently, the public wage bill is at 56 percent of national revenue.

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But what Ms Mengich cleverly avoided in the gazette notice is that despite abolishing the plenary sitting allowance for MPs and MCAs, she gave Sh150,000 in monthly house allowance to each of the 416 members in the National Assembly and Senate.

The MCAs, who used to take home Sh3,000 in plenary sitting allowance at the County Assemblies, were awarded a monthly house allowance benefit of Sh40,000.

The new house allowance to MPs translates to Sh748.8 million a year and Sh3.74 billion for the five years they will be in office.

The county assemblies have 1,450 elective MCAs plus those nominated in gender top ups in line with the two-thirds gender rule.

At least 787 MCAs were nominated to various County Assemblies after the 2017 general elections, bringing the number to 2,237 plus the elected ones.

Unlike in the National Assembly and the Senate where membership is capped, at the County Assembly it is determined by compliance with the gender rule.

Although the electoral commission has gazetted the elected MCAs in the August 9, 2022 General Election, it is yet to gazette the nominated ones.

But assuming we end up with 2,237 members in the County Assemblies, it will cost the taxpayer Sh5.37 billion in house allowance for the period of five years.

This compared to what the membership at the national and county legislators are paid in plenary sitting allowance, is on the higher side.

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