The National Social Security Fund (NSSF) has provided clarification regarding the ongoing increase in monthly contributions as mandated by the 2013 Act no. 45.
According to a statement released by the NSSF, the Supreme Court has not overturned the Court of Appeal’s orders, which permitted the government to proceed with the implementation of the disputed Act.
The notice issued by the National Social Security Fund (NSSF) comes in response to a ruling by the Supreme Court on Wednesday, February 21.
The ruling, led by Chief Justice Martha Koome and involving seven judges, indicated a review of the decision permitting the government to proceed with the implementation of the Act, despite its prior ruling of unconstitutionality.
In light of the Supreme Court’s decision, the legality of the new deductions will now be subject to determination by the Court of Appeal.
Consequently, the National Social Security Fund reminded Kenyans that employers are still required to remit NSSF contributions in line with the Act.
Employees, employers, and various associations, including the Kenya Tea Growers Association and 14 other employer and employee groups, filed five petitions contesting the constitutionality of the Act. They argued that it would have adverse implications for human rights.
Similarly, Lawyer John Maina Ndegwa lodged a petition with the high court, claiming that the contribution rates were excessive given the already high cost of living experienced by Kenyans. The Labour Court declared the NSSF Act of 2013 unconstitutional, leading to its annulment and preventing the state from proceeding with its implementation.
However, NSSF appealed the ruling and a three-judge bench ruled that the ELRC did not have the jurisdiction to hear a case touching on constitutional validity of the NSSF Act 2013. According to the Appellate Court, the issue fell squarely within the jurisdiction of the High Court. The case was then escalated to the Supreme court.
NSSF announced that the new deductions would take effect at beginning February 2024, increasing contributions to KES 840 for the lower limit deductions. KES 420 of that amount is to be contributed by employees while the other KES 420 is to be contributed by the employers.
In addition, the lower earnings limit, or the minimum pensionable salary, was raised to KES 7,000 from the previous KES 6,000. Consequently, this led to an increase in deductions from KES 360 to KES 420, with the employer matching the contributions with KES 420.
For the upper earnings limit, or the higher pensionable salary, it was raised to KES 29,000 from the previous KES18,000. This resulted in workers being deducted KES 1,740, up from the previous KES 1,080. Each contribution was to be matched by the employer.
