Civil servants face drastic pay cuts starting April next year following an advisory of the Salaries and Remuneration Commission reducing allowances from 247 to five.
Workers in public service institutions will from April 30, 2022 only earn house, commuter, job-related, task-related and labour market adjustment allowances.
Even so, the salaries agency would regularly review the extra perks taking into account their affordability and fiscal sustainability.
SRC chairperson Lyn Mengich directed that all state agencies classify all allowances they presently pay out into the five broad categories.
The entities are expected to submit the list to the commission for review and advice by November 30, failure to which the allowances would be illegal.
The commission is also converting to paying allowances as an absolute figure and not percentages, saying percentages are to blame for the country’s ever-ballooning wage bill.
“SRC shall set, review and advice on the allowances that constitutes the five categories outlining the purpose, eligibility criteria, criteria, rate and scope,” Mengich said.
The agency data shows wage bill increased to Sh827 billion in the financial year 2019–20, an increase of Sh32 billion the previous year.
The country’s wage bill to total revenue was 49.5 per cent in the said year while the wage bill to ordinary revenue was 51.7 per cent in the same period.
The payroll has grown from Sh558 billion in the year 2014-15, to Sh615 billion, Sh664 billion, Sh733 billion and Sh795 billion successively.
SRC has also sought to provide that allowances payable to public officers shall not be used for purposes of computing pension or gratuity.
The commission revealed that the proportion of allowances to the gross salary ranges from 43 to 259 per cent hence leading to a lower basic salary or gross salary in the public service.
Mengich also decried that similar allowances are paid as a percentage of basic salary while others are paid in absolute amounts, resulting in distortions in remuneration.
In this regard, the policy is being changed to provide that the proportion of basic salary to gross salary would be no less than 60 per cent – to be implemented progressively.
“Allowances shall be paid in absolute amounts and not as a percentage of the basic or gross salary, unless where explicitly advised by SRC,” the commission said.
Mengich said they would issue an advisory on conversion of the allowances that are currently paid as a percentage of the basic salary in absolute amounts, “while ensuring consistency across public service.”
All the same, the commission holds that the allowances applicable today would continue to be paid until the final advisory would be issued after the review.