What Does Your MP Actually Get Paid? A Detailed Breakdown
How much, exactly, do Members of Parliament in Kenya earn? Under the current laws, the pay for MPs and other legislative positions is set by the National Assembly Remuneration Act, which is one of the shortest Acts in the Laws of Kenya.
This act was introduced into parliament in 1975 by Mwai Kibaki when he was the Minister for Finance. Adjustments in MPs pay are usually made as amendments to this act.
In the First Schedule of the Act, the pay for MPs is set our as follows:
The Second Schedule outlines their pay in regards to mileage and transport allowances, that is the Commuted Allowance of KES 75,000 and the Fixed vehicle cost of KES 366,000
Pesatalk obtained the following handwritten copy of a section of an MP’s payslip, which matched what was outlined in the Act.
What does each of these items mean?
Salary: KES 200,000 (KES 2,400,000)
When MPs say they are taxed, this is the item on which those taxes are levied. The total tax that is paid on their salaries is KES 53,000.
Constituency Allowance: KES 50,000 (KES 600,000 pa)
Initially, this allowance was given to enable MPs open and run constituency offices. With the coming of CDF, the allowance translated into pocket money for the MPs to use as they desire.
House Allowance: KES 70,000 (KES 840,000pa)
Originally, this was an accommodation allowance, meant to reimburse an MP based up-country to enable him/her work in Nairobi by attending Parliament on Tuesday, Wednesday, Thursday and to go back home on Friday. The current house allowance enables an MP buy or rent a house in Nairobi and do whatever he/she may want with it, including renting it, or having it as an additional home.
The Akiwumi Report pointed out that this ‘one of the benefits enjoyed by all other Kenyans who are paid House Allowance and which therefore is not a unique allowance enjoyed by Members of Parliament”
Extraneous Duty Allowance: KES 30,000 (KES 360,000pa)
Allowance paid for being called to perform duties outside the scope of position’s role profile e.g. being called upon to carry out ad hoc investigative committee duties.
Entertainment Allowance: KES 60,000 (KES 720,000pa)
For conducting parliamentary and related business in hotels and other such places.
Transport/Commuter Allowance: KES 75,000 (900,000 pa)
This is an allowance that is paid for vehicle maintenance and repairs. It is separate from the vehicle fixed allowance.
This was recommended by the Cockar Tribunal which argued that if an MP is given a grant/salary advance of KES 55,000 per month, for one parliamentary term of 60 months (5 years) ( KES 55,000*60= KES 3,300,000) to enable them buy a new duty-free vehicle, and in addition, given a car maintenance allowance of KES 75,000 per month; the MPs could do away with the vehicle fixed allowance.
They half implemented this recommendation.
The MPs did not do away with the KES 336,000 as the Cockar Tribunal had recommended, but actually increased it to KES 366,000, adopted the Car Maintenance Allowance to their pay, and got the provision for KES 3.3 Million to buy cars.
Vehicle Fixed Allowance: KES 366,000 (KES 4,392,000pa)
There is a lot of mystery that seems to shroud this particular allowance that has been referred to in different names such as Commuted Mileage Allowance, Reimbursement of Vehicle Running Costs, Motor Vehicle Operating Allowance and Fixed Allowance for Reimbursement of Vehicle Running Costs.
This allowance was initially intended as a reimbursable emolument at the rate of KES 12, 200 per day and was based on the principle that an MP is enabled to travel 3,000KM a month (100KM/day) reimbursed at KES 122 per KM without the need to claim or produce receipts. Additional payment to support transport would also be made through mileage claims.
In 2000, Member of Parliament increased this allowance to KES 336,000 from KES 118,000. The Cockar Tribunal observed that this item was contentious and recommended that the KES 336,000 paid monthly to MPs be replaced with a vehicle grant. This was in the form of KES 3.3M for each MP and they were to receive an increased transport allowance of KES 75,000 to facilitate vehicle maintenance and repairs.
However, the KES 336,000 was subsequently approved as a monthly transport allowance and, in 2006, the figure was increased by KES 30,000 to KES 366, 000 paid to all parliamentarians to date.
According to the National Assembly Remuneration Act, every Member of the National Assembly shall, in respect of every sitting of the National Assembly he attends, receive an attendance allowance of KES 5,000 per sitting. There are other sitting allowances for the various commissions that they may serve in as per the table below:
At the end of their 5 year term, all members of the National Assembly are entitled to “a severance allowance at the rate of thirty-one per centum of the salary specified in the second column of the First Schedule for every year in service”.
This means that, at the bare minimum, each MP will take home KES 3, 720,000
The National Assembly provides a comprehensive medical insurance cover, with the following limits to the MPs through AON Minet Insurance Brokers (as of 2009):
Group Personal Accident Cover
Since 2003, the PSC has provided group accident cover to the 224 members of Parliament with the following benefits:
Members of Parliament are entitled to KES 15 Million at low interest rates to acquire houses. This is in addition to their KES 70,000 per month housing allowance.
Each MP is entitled to a grant of KES 3.3 Million to buy a car of their choosing.
Additional Costs to the Taxpayer
The Estimates of Recurrent and Development Expenditure (2011/2012) of the Parliamentary Service Commission, the body that deals with running, and paying for the running of parliament, had a total budget of KES 9,130,126,361 for recurrent expenditure broken down as follows:
- KES 6.3Billion for salaries and related allowances for both members of the National Assembly and staff of the PSC
- KES 1.36Billion for members car grant
- KES 900Million for car loan and mortgage facilities
The table below shows the actual costs attributed to the legislative services, that is, the MPs:
Taking the total cost and dividing by 224 (212 elected, 10 nominated and 2 ex officio), we get that the actual direct cost of an MP is KES 2,467,213 per month. This means that on average, not only do they take home KES 768,000 per month after tax (for back benchers) per month, but they cost the taxpayer an additional KES 1.6 Million each in benefits, allowances and costs.
Some legal stuff
MPs have always claimed that their allowances are legally non-taxable. This is true, but this is because the same law that creates these allowances goes ahead to make then non-taxable by declaring:
All allowances payable under this Act shall be exempt from income tax notwithstanding the provisions of any other written law relating to income tax.
There was this little gem in the Akiwumi Report (item 15)
“An important matter that arose during the consideration of the issue of allowances of the Members of the National Assembly should be taxed, is whether in the first place the KES 366,000 monthly allowance, paid to them as “reimbursement of vehicle costs by mileage”, with effect from 1 July, 2005 had been legally approved as prescribed by the relevant legislation namely, the National Assembly Remuneration Act. The relevant part of this Act1 is Section 4(1) thereof, which provides as follows:
“Without prejudice to Section 2 and in addition thereto, every Member of the National Assembly of the category specified in the first column of the Second Schedule shall receive the allowances specified in relation to him in the second column of that Schedule“
In this regard the applicable category of the Member of the National Assembly as set out in the first column of the Second Schedule is:
“Every Member of the National Assembly other than the Speaker the Deputy – Speaker, the Vice President, other Ministers, and Assistant Ministers “,
And the relevant allowance involved is, as set out the second column of the Second Schedule, to be:
“C. Transport allowance in any other circumstances approved by the Treasury“
The Treasury only recommended and did not approve the payment of this allowance. The National Assembly, however, took this recommendation as an approval and went ahead to pay it
Translated from legalese, it means that the KES 366,000 that MPs take home as Vehicle Fixed allowance is illegal.
From the analysis above, it is evident that MPs are an overpaid lot, despite the Speaker’s utterances that they are paid peanuts. But then again, a comedian once remarked that an elephant is a mouse built to government specifications. In this case, a KES 2.5M per MP per month cost to taxpayers is definitely peanuts; by Marende’s specifications