Middle-class workers in Kenya are experiencing significant income reductions due to new deductions for the Social Health Insurance Fund (SHIF), alongside other statutory levies like the housing tax and Pay As You Earn (PAYE). Under the new policy, workers are contributing 2.75% of their gross income to SHIF.
For example, a Kenyan earning a gross salary of Sh500,000 now sees Sh161,957 deducted, encompassing SHIF, NSSF, PAYE, and housing levies. This burden is straining the middle class, with many seeing up to 40% of their paychecks consumed by taxes and deductions.
Critics argue that SHIF benefits fall short compared to private insurance. Trade unions are calling for salary raises to counterbalance the new deductions, with union leaders stating the scheme was poorly designed and fails to provide adequate healthcare services.
Under SHIF, facilities receive fixed reimbursements for procedures, such as Sh11,200 for childbirth and Sh2,400 per day for hospital admissions, which experts say may force patients to cover extra costs. As frustrations grow, union leaders and workers question the value of SHIF, given the substantial deductions and limited service availability.
