City Lawyer Files Lawsuit Against Govt’s Proposal to Raise NSSF Contributions

January 17, 2024

A lawyer has filed a case at the Milimani Law Courts in Nairobi challenging the upcoming National Social Security Fund (NSSF) deductions scheduled to take effect next month.

City lawyer John Maina Ndegwa argues that the economic consequences of the deductions will adversely affect Kenya’s economy as increased operating costs will compel more employers to declare their workers redundant.

“The said proposed deduction from the employees are coming at a time when Kenyans are inebriated with the high cost of living with a shrinking pay slip because of a depressed economy,” the petition reads in part.

Mr Ndegwa is now urging the court to expedite the matter and grant a temporary order restraining the NSSF board from implementing the contribution rates for 2024.

“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 2014 yet the Board has failed to offer guidance to the employers on how to implement this causing confusion and anxiety in both public and private sectors of the economy of Kenya,” court papers read.

Year 2 Contributions Rates Null and Void

Ndegwa is seeking a temporary suspension of the implementation of the new rates until the petition is determined. He will be urging the court to nullify the notices issued on January 12 and declare the Year 2 Contributions Rates null and void.

The revised NSSF rates indicate an increase in the lower earnings limit, previously set at Sh6,000, now raised to Sh7,000. Employees falling into this category will see their contributions rise from the existing Sh360 to Sh420.

Simultaneously, the Upper Earnings Limit has been elevated from Sh18,000 to Sh.29,000. Consequently, the majority of workers in this category will contribute Sh1,740, up from the current Sh1,080.

Meanwhile, employers will continue to match each contribution, maintaining the existing practice.

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