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Government to Jail Employers Who Fail to Contribute to the National Housing Fund

Author 2 years ago
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By Moses Adongo

Employers risk spending two years in jail for failing to register or evade contributing to the government’s affordable housing scheme.

This is according to a new guideline published by the Ministry of Transport, Infrastructure and Urban Development which require all employers with one or more contract workers to register their employees and contribute to the housing fund.

“Any person who fails, neglects or refuses to register under this regulation commits an offense 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,” reads the gazette regulations.

The regulations require formal workers to contribute 1.5% of their salaries to the scheme which will be used to facilitate the construction of 500,000 affordable houses by 2022.

Employers, who are supposed to make the contributions on behalf of their employees, will be slapped with a 5% penalty if they fail to remit the funds by 9th of every month.

Upon registration to the scheme, the government will establish and maintain individual accounts where the contributions will be credited. Each member will be granted access to the account which will be known as Housing Fund Credit account.

Registered members will, however, have to make contributions into the scheme before accessing the affordable houses.

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

The new regulations also allow self-employed Kenyans to voluntarily join the National Housing Development Fund by contributing a fee of Ksh200 monthly.

Members will also be at liberty to opt out of the scheme and get back 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.”

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