Treasury rules out Sh200,000 honorarium for former councillors, proposes Inua Jamii support
If Mbadi’s Inua Jamii proposal is approved, former councillors would receive Sh2,000 monthly payments through the programme, which supports vulnerable groups including the elderly, orphans and persons with disabilities.
Treasury Cabinet Secretary John Mbadi has ruled out compensating former councillors with a one-off Sh200,000 honorarium, saying there is no legal basis to support such payments.
Appearing before the Parliamentary Labour and Social Welfare Committee on Wednesday, Mbadi told senators that the proposal to pay 328 former councillors who served for less than 20 years cannot be implemented without a clear legal framework.
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He instead recommended enrolling them in the State’s Inua Jamii social protection programme.
Mbadi revealed that over 12,000 councillors served before the 2010 constitutional reforms, but only 328 meet the criteria under a 1994 presidential circular.
“Circular 13/94 only recognises councillors with 20 years of continuous service as eligible,” he said, noting that most councillors served part-time without pension entitlements.
Nominated Senator Miraj Abdullahi asked whether the Treasury had conducted a forensic inquiry to verify how many of the 328 councillors were still alive, as recommended by the Attorney General.
In response, Mbadi said that it is the responsibility of individual councillors to submit their claims to the Pensions Department if they believe they qualify.
Muranga Senator Joe Nyutu and Nyamira Senator Okongo Mogeni urged the Treasury to explore compassionate solutions. Nyutu suggested seeking presidential intervention similar to support given to sports icons like the Harambee Stars.
However, Mbadi reiterated that only a legal framework could enable such payments.
He also highlighted a persistent issue of unremitted pension deductions, describing it as a “criminal” practice. According to Mbadi, local authorities and counties have collectively failed to remit employee pension contributions, accumulating Sh103.3 billion in arrears as of October 2024.
If Mbadi’s Inua Jamii proposal is approved, former councillors would receive Sh2,000 monthly payments through the programme, which supports vulnerable groups including the elderly, orphans and persons with disabilities.
The committee also scrutinised the Kenya Railways Staff Retirement Benefit Scheme (KRSRBS), where over 8,000 retirees claim arrears estimated at Sh1.6 billion, while management estimates Sh574 million. Despite holding assets worth Sh38.46 billion, nearly 90 per cent are tied up in property, limiting cash availability.
Mbadi explained that the scheme operates on a non-contributory basis.
“From the onset, the Kenya Railways staff benefits scheme has operated on a non-contributory basis. No monetary contributions are made to the scheme by members or sponsors,” he said.
To improve liquidity, Mbadi revealed plans for the Affordable Housing Board to acquire 141 acres of KRSRBS land in Makongeni for residential housing development.
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“This transaction presents a strategic opportunity for the Kenya Railways staff retirement benefits scheme to unlock significant value from one of its largest and most strategically related land assets,” he said.
He added that the proceeds will strengthen the scheme’s financial position and enable timely payments to retirees.
Former Kenya Cooperative Creameries (KCC) employees, waiting over two decades for benefits following the 1999 receivership, also petitioned the committee through lawyer Simoni Namada. Mbadi maintained that a Court of Appeal ruling absolves the government of any legal obligation to pay.
The committee fined Cooperatives CS Wycliffe Oparanya Sh500,000 for failing to honour summons regarding ex-KCC workers’ SACCO dues and directed that he be re-summoned in September. Senators cited Article 125 of the Constitution and Sections 18 and 19 of the Parliamentary Powers and Privileges Act, 2017, granting committees powers equivalent to the High Court to enforce attendance.
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