google978c4e921fe1bd28.html

Uhuru’s low-cost housing: Rude shock for workers, employers

What do you think of this post?
  • Awesome 
  • Interesting 
  • Useful 
  • Boring 
  • Sucks 
  • Bonoko 

n aerial view of a housing project in China. Kenya hope to have such houses in urban areas.

Employers who will not register with the Government or refuse to make contributions to President Uhuru Kenyatta’s dream low-cost housing scheme will be sent to jail for two years.

Under new guidelines published by the Transport, Infrastructure, Housing, and Urban Development Cabinet Secretary James Macharia, all employers with one or more contracted workers will be required to register with the housing fund as contributing employers and to register their employees as members.

“Any person who fails, neglects or refuses to register under this regulation commits an offence and shall, upon conviction, be liable to imprisonment for a term of two years or a fine not exceeding ten thousand shillings or to both,” according to the regulations that have been gazetted.

Every formal worker is expected to contribute to the Government’s ambitious plan to build 500,000 houses by 2022 with 1.5 per cent of their gross salary. Employers are supposed to make a similar contribution on behalf of each of their employees.

According to the regulations, failure to remit the 3 per cent contribution by the 9th of every month will attract a 5 per cent penalty.

The National Housing Corporation (NHC) is required to establish and maintain for each member of the housing fund an individual account to be known as the Housing Fund Credit to which shall be credited all contributions made to the fund.

It has also emerged that Kenyans will contribute money for at least five years before getting access to the low-cost houses.

After contributing without fail to the proposed National Housing Development Fund for that period, employees will qualify to get funds for a mortgage at 7 per cent annual interest rate, according to draft regulations.

Uninterrupted contribution

“Contributions by individuals shall only be accessed for purposes of offsetting housing loans, security for mortgage or housing development after five years of uninterrupted contribution and shall attract such an annual return as may be determined by the Corporation,” section 3 of the housing fund regulations reads.

This means Mr Kenyatta will retire from office before the first beneficiaries occupy the low-cost houses.

Self-employed persons are allowed to join the fund as voluntary contributors by paying Sh200 a month; Sh100 for administration and Sh100 as benefit.  

Other than employer remittance, members wishing to contribute extra cash are allowed to pay the amount they wish. The amount will be credited to their personal account.

Some contributors will be allowed to opt out and get access to their money after 15 years. “A contributor who becomes incapable of continuing the contributions to the fund due to disability or, not obtained a housing loan or has not been allocated a house within 15 years or has attained retirement age, whichever is sooner – shall be eligible to a refund of his or her contribution and accrued interest which amount shall be paid within three months upon request.”

Persons who want to recover their money can choose to transfer their contributions to a pension scheme registered with the Retirements Benefits Authority, any person registered and eligible for affordable housing, their spouse or dependent children or to receive their cash.

The fund will be divided into three: “Low Cost Housing” designated for those earning between Sh15,000 to Sh49,999 a month, “Mortgage Gap Housing” for those earning between Sh50,000 to 100,000 a month and “Social Housing” for those earning between Sh0 to Sh14,999 a month.

In the event the housing fund is wound up, the cash balances shall be transferred to the exchequer while other assets of the fund shall be transferred to the ministry in charge of housing to facilitate appropriate refunds to the contributors.

Those who may overpay or are overcharged will be allowed to apply to get access to the extra contributions but without interest.

 

-www.standardmedia.co.ke

Comments

comments

%d bloggers like this: