Legal practitioner John Maina Ndegwa has filed a case in Milimani Law Courts, challenging the new National Social Security Funds (NSSF) rates.
In his petition, Ndegwa wants the new NSSF monthly contributions quashed and its implementation which is effective next month, rescinded.
Why lawyer want new NSSF rates quashed
Lawyer Ndegwa argued that the implementation will have no economic benefits, rather it would massively onslaught Kenyans considering that already they are battling with a depressed economy.
“The said proposed deduction from the employees coming at a time when Kenyans are inebriated with the high cost of living with a shrinking pay slip because of a depressed economy, ” Ndegwa petition states.
NEW NSSF RATES CHALLENGED
John Ndegwa has filed a case at the Milimani Law Court challenging the proposed NSSF deduction.These rates are set to remain in effect until the next review in January 2025
Part of a phased plan that began last year to gradually increase rates over a… pic.twitter.com/G86qAA0LYI
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The city lawyer pointed out that, not only the implementation will engage in pessimistic of the economy but also serve as a reductant in various employment sectors something which will seriously accelerate unemployment rates while employers also forced to reduce the number of workers.
Ndegwa wants the court to suspend the implementation and give restraining orders to the board of NSSF against putting the Act into practice.
“The 3rd schedule of the NSSF Act 2013 spells clearly the amount chargeable within the first four years after the commencement of the Act on 10th January 2024 yet the Board has failed to offer guidance to the employers on how to implement this causing confusion and anxiety on both public and private sectors of the economy of the Kenya,” the petition read.
What are the new NSSF rates?
The implementation of the new National Social Security Funds (NSSF) contribution which is supposed to be effective February 2024, will see the employees earning a minimum monthly salary contribute KSh 420 up from KSh 360.
This applies to those earning a lower limit of KSh 7,000 since the new rates are based on the findings that the lowest pensionable salary has increased from Ksh 6,000 to KSh 7,000.
Additionally, the new rates indicate that the upper earnings limit has moved from the current KSh 18,000 to KSh 29,000.
This translates to a monthly deduction of KSh 1,740 will be made from employees who fall under this category, a figure higher than the current deduction of KSh 1,080.
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