Image featuring the NSSF building.PHOTO | NSSF
In Summary:
- The National Social Security Fund (NSSF) mandates employers to increase deductions following a recent Supreme Court ruling.
- Despite the court’s decision to reassess the challenge against higher rates, NSSF asserts its authority to implement deductions in line with the National Social Security Fund Act No. 45 of 2013.
NSSF has issued a directive instructing employers to adjust deduction rates in compliance with a recent Supreme Court ruling. Despite the court’s decision to refer the challenge against increased rates back to the Appellate Court, NSSF emphasizes its authority to enforce these deductions.
“The Supreme Court has not rescinded the Court of Appeal Orders of February 3, 2023. Consequently, the National Social Security Fund Act No. 45 of 2013 remains in effect,” the notice stated.
The notice emphasized, “We confirm the communication sent to Employers on January 12, 2024, regarding the remittance of NSSF contributions in accordance with the National Social Security Fund Act No. 45 of 2013. The Fund maintains its dedication to adhering to legal principles and fulfilling all obligations while prioritizing the welfare of our stakeholders.”
The Supreme Court’s directive for a fresh hearing stems from the lower court’s failure to address pertinent legal issues raised during the appeal process. Given the public interest and the prolonged legal proceedings, the Supreme Court emphasized the need for a prompt resolution.
“In light of the prevailing circumstances, the case is slated for referral to the Court of Appeal to ascertain the substantive merits of the ELRC’s judgment. Given the essence of the matter, its notable public interest, and the duration it has traversed through the legal process, it is deemed fitting for the matter to receive expedited attention,” the judgment delineated.
As a result of the directive, employed individuals in Kenya will experience reduced incomes this month, with employers contributing towards their employees’ social security. The new deduction rates entail adjustments for various income brackets:
- Employees earning Ksh20,000 will witness an increase in deductions from Ksh1,080 to Ksh1,200.
- Those with a monthly income of Ksh30,000 will see deductions rise to Ksh1,800 from the previous Ksh1,080.
- Individuals earning between Ksh36,000 to Ksh50,000 will have Ksh2,160 deducted from their salaries.
- Similarly, employees earning Ksh100,000 will also face a deduction of Ksh2,160, up from the current Ksh1,080.