Affordable housing is one of President Uhuru kenyatta’s big four agenda; others being Enhancing Manufacturing, Food Security & Nutrition and Universal Health care. The housing scheme has already been given a green light by the president, when he signed the 2018 Finance act, recently. Under the Affordable housing scheme, employees will contribute 1.5 percent of their monthly basic salaries towards the National Housing Development Fund while the employer tops up with an equal amount; provided that the sum of the employer and employee’s contributions do not exceed Kshs. 5,000 per month.
The Deputy President (H.E William Ruto), while addressing the Kenya union of Post Primary Education Teachers (KUPPET) delegates on Saturday 15th December 2018, defended the housing scheme saying: “We want to make it possible for a Kenyan with five thousand shillings to have a mortgage (where they pay Ksh. 5,000 per month) and in fifteen years or twenty years, instead of paying rent of five or ten thousand (monthly) the house becomes yours.” This means that for one to own a house under this scheme he/she will have to wait for a whooping 15 years! This is not, definitely, a good deal for teachers whose payslips have already been raided by the marauding Monster; the AON-Minet Medical insurance scheme. Teachers are also staring at a loss of 7.5% of their salaries to a proposed contributory Pension scheme. In the scheme, the employee will contribute 7.5% of his/ her monthly earnings while, the employer tops it up with 15%. This scheme, to be effected next year (2019), is mandatory for all employees joining the service and all those below 45 years.
According to the finance bill of 2018, a contributor will have to wait for a minimum period of fifteen years before the fund matures. “For employees who qualify for affordable housing, the contributions accrue to the employee and shall be used to finance the purchase of a home under the affordable housing scheme (upon expiry of the fifteen years from the date one starts to make contributions),” reads the 2018 finance bill, in part. The sad part is, if one does not qualify for the housing unit or retires before the expiry of the fifteen years such an individual will either transfer the accrued sum to a pension scheme or receive the contributions in cash. When the contributions are to be paid in cash they shall be included in the contributor’s taxable income for that year and be subjected to tax; at the prevailing rates. This is a big rip off, that is distasteful!
According to the Deputy President (DP), teachers will be the ‘biggest’ beneficiaries of the housing scheme. “In fact, the biggest beneficiaries of our housing scheme will be the teachers of Kenya; I dare to say and you will poof me right one day. (This is) because you are the people in the middle class,” said the DP. This was met with protests from the delegates who expressed their dissatisfaction; forcing the DP to say that the government was ready to engage the teachers further. “And that is why, Mr Secretary general (KUPPET’s Akello Misori) we are willing , we are ready, to sit down and engage with you on behalf of KUPPET and the teachers of Kenya. So that you can understand how this housing plan will benefit the teachers of Kenya,” said the DP. This caused, further, wild protests from the delegates. “We want to commit that even if it means we isolate part of this housing plan specifically for teachers, we will do that. Even if it means that we re-invent part of of this plan to belong specifically to teachers, we are willing to go that direction. Because you people (teachers) can see directly how your 1.5% (contribution) is going to benefit you,” the DP added.
The teachers’ unions are already opposed to the way this housing plan has been formulated and are asking the government to engage them in talks; on the way forward. On Thursday, the Kenya National Union of Teachers’ (KNUT) delegates made their intention clear on the housing scheme. The delegates, attending their Annual Delegates Conference at the BOMAS in Nairobi, shutdown the Principal secretary (to the Ministry of Transport, Infrastructure, Housing and Urban Development), Mr. Charles Hinga Mwaura, when he stood to highlight on the scheme. The angry delegates did not give Mr. Hinga time to even introduce himself. A frustrated Mr. Hinga insisted that the Contributory Housing Scheme will be implemented as planned, amid shouting from the disgruntled delegates. KNUT’s Secretary General, Hon Wilson Sossion, has already warned of industrial action if the deduction is effected. This shows the gravity and anguish attached to the housing scheme.
Also opposed to the Housing scheme is the Secretary General to the Central Organization of Trade Unions (COTU), Mr. Francis Atwoli. Similarly, during their Annual Delegates’ Conference (yesterday), KUPPET General Secretary (Mr. akello Misori) said teachers are strongly opposed to this housing scheme, as currently constituted. “Your excellency (the Deputy President), I do not want to forget this. There is a new legislation which require teachers or workers of this country to fund housing to the tune of 1.5% . We are apprehensive, because we feel that will do well with a mortgage, for professionals like us. But, the process of having this 1.5% is going to hurt us,” Akello told the deputy president.
Mr. Akello says if no talks are held between the union and the government, then they will call for industrial action from the members. “We will wish to ask a re-looking to this policy and therefore, the matter taken back to parliament. Currently, teachers are on loans, huge ones. Some of them do not earn,” added Misori. He further noted that further deductions from teachers’ payslips will leave them with no option than venturing into side hustles; to raise an extra coin.
The DP in his address, yesterday, indicated that most teachers do not have decent housing units and hence will be the biggest beneficiaries to the new housing scheme. Wherever the Deputy President got the statistics from, one wonders! For your information, Mr. Deputy President Sir, most teachers own houses; decent ones. Secondly, with the coming of delocalization teachers will definitely continue staying in rental houses. A mortgage can do better as at now, for the teachers.
Fast forward, a good government is one that listens to her workers. If pertinent issues have been raised against the housing scheme and even the AON medical scheme, by teachers, then the government is obligated to amicably solve these biting concerns. Having knee jerk decisions and forcing unpalatable policies on workers is quite unfortunate and uncalled for.
By: Segera Festus for Newsblaze Digital. (http://Newsblaze.co.ke)