14 November 2010 Daily Nation
The government is hiring a private firm to implement a rule that will block all the 460,594 officers from committing more than two thirds of their basic salaries on loans and other forms of borrowing.
The move will affect 246,468 teachers and Teachers Service Commission (TSC) employees, 214,126 civil servants and uniformed staff.
It aims at ensuring staff go home with at least a third of their salaries to cater for living expenses.
The new scheme follows revelations by a survey that some civil servants took up loans and hire purchase schemes that consumed all their salaries.
The study found that the workers were not repaying Sh10 million in monthly commitments since their payslips could not support them.
The deferred payments could have gone up since the report was completed in July.
"This is clearly untenable and gives the service a bad image," said the report, titled Introduction of a Payroll Deduction Management Service.
The government has signed an agreement with Payment Solutions Kenya to develop and run the payroll management service.
The firm will validate all payroll data with a view to verifying employees' credit status before they acquire loans from banks, microfinance institutions and hire purchase organisations.
It will also process loan transactions for deduction according to the one third payroll rule. Individual ministries are expected to provide employee information to the private firm in the new arrangement.
According to the statistics, the amount of deferred deductions in the civil service and uniformed personnel stood at Sh8.5 million in July.
The total amount of deferred deductions for the teachers and staff working at the TSC is Sh2 million.
The most common deferred deductions in the civil service and TSC include bank and Sacco loans, hire purchase and social welfare loans, according to the report.
The report said efforts by the government to activate the provision of the one third basic salary rule by using a payroll system that could not effect any deductions beyond the two-thirds of an officer's basic salary had failed to control over commitment of salaries.