Sh12.7b budget deficit puts at risk teachers medical scheme

National Assembly Education Chairman Julius Melly before the National Assembly Budget and Appropriations Committee at the Glee Hotel in Kiambu on March 26, 2026. [Boniface Okendo, Standard]

Hundreds of thousands of teachers and their families now risk losing access to health care due to underfunding.

The Teachers Service Commission (TSC) yesterday disclosed a Sh12.7 billion funding gap in the 2026/2027 financial year budget.

This comprises Sh5.3 billion meant to provide group life, group personal accident and work-related injuries and Sh4.4 billion in pending bills owed to Minet Insurance,which was the cover provider before the government pushed the teachers to the Social Health Insurance Fund managed by the Social Health Authority (SHA).

The deficit also includes Sh800 million meant to undertake field operations and another Sh2.2 billion that was intended for the payment of acting allowances for administrators.

“There is no provision in the budget for group life, group personal accident and WIBA covers for teachers which requires Sh5.3 Billion. It is critical that resources are made available to the commission to cater fully for this medical cover since it touches on the well-being of the teachers,” reads the documents submitted to the National Assembly Budget and Appropriations Committee.

“It is noted that after the commission shifted from private insurance to SHA in the provision of medical cover for teachers, a saving of Sh4 billion was realised and if this saving is provided by the National Treasury, it could be directed towards providing for group life cover for teachers.”

If not addressed, the funding gap risks affecting more than 450,000 teachers and their over one million dependents.

The National Assembly is now seeking at least Sh500 million budgetary increment for the provision of medical insurance.

The submissions further revealed that the commission requires a Sh422 billion budget comprising Sh421.9 billion as recurrent expenditures and Sh742 million as development budget. But compared to the approved budget ceilings, the agency is struggling with a Sh300 million shortfall, which risks hampering its operations.

Out of the billions, the commission intends to promote at least 30,000 teachers, convert 20,000 interns to permanent and pensionable terms, re-tool 120,000 teachers on CBE as well as facilitate implementation of the second phase of the 2025-2029 Collective Bargaining Agreement.

At the same time, learning in both primary and secondary schools risks disruption after it emerged that the Ministry of Education is grappling with a Sh57 billion capitation funding gap.

This even as the Higher Education Loans Board, Universities Funding Board and capitation for junior school sectors have been subjected to massive  budgetary cuts amounting to Sh27.99 billion.

Documents tabled before the House committee show that the capitation gap  include Sh8.6 billion for primary, Sh23.7 Billion for junior schools and Sh23..7 billion for senior schools.

This means that learners might not receive the funds in line with the existing policy that dictates Sh2,330 for primary school learners, Sh15,042 for junior school learners and Sh22,244 for senior school.

Education Committee Chairperson Julius Melly, who had appeared before the committee, warned that the underfunding would negatively impact learning in schools. He implored the committee to consider increasing the budget.

“The sub-sector  has funding gaps in its core areas especially in the provision of capitation. Based on the targeted number of learners and the per capita allocation, the funding gap for capitation in 2026/27 financial year stands at Sh57 billion. The underfunding will put a strain on the institutions,” he said.

The MP also raised a red flag over the refusal by Principals and Head teachers to adhere to circulars released by the Ministry of Health, especially those guiding on school fees charges and on the issuance of certificates.

Melly brought to the fore that there existed no clear policy on the placement of learners to senior school as the recent transition led to some schools admitting more than their capacity resulting in overcrowding which subsequently putting a serious strain on facilities.

The result of this, he said, was that some institutions remained without students despite the government efforts to put up the facilities.

“This has created an impression that there are excess schools which is not the case…There are also many  regions where learners are not benefitting from the school meals programme yet these are also disadvantaged regions hence the need to re-assess and re-map afresh the beneficiary areas to ensure the intended purpose of these programmes is realized. Further, SNE learners need also to be supported under this programme;” added Melly.