Ensure correct distribution of wealth
Sayyidatuna Khawla Radhiyallahu Anha says that I heard Rasulullah Sallallahu Alayhi Wasallam saying: “Verily, some people spend Allah’s Wealth (i.e. Muslim’s wealth) in an unjust manner; such people’s punishment will be the Fire on the Day of Resurrection.” (Bukhari)
*Question and Answer*
Q. It is compulsory for employees to invest a portion of their salaries in a Pension Fund. After retirement, employees have access to one third of the entire fund. Thereafter, the two thirds of the fund will be paid to employees on a monthly basis. If an employee passes away, the remainder of the two thirds of the fund will be given to the beneficiaries of the fund. What portion of the fund forms part of one’s estate and what portion of it is Zakaatable?
A. In the enquired situation, Zakaat will be due on the one third 1/3 of the funds accessible after retirement as well as the monthly pay out received from the fund. Zakaat will be calculated from the time these funds become available and not before that.
There is no Zakaat on the two thirds 2/3 of the fund retained after retirement as the investment was not by choice and neither is access available to any portion of it.
In the case of demise after retirement, the remainder two thirds 2/3 of the funds will belong to the beneficiaries of the fund. The two thirds 2/3 of the funds will not form part of the deceased estate but will belong to the beneficiaries stipulated by the deceased.
And Allah Ta’ala Knows Best
Mufti Ismaeel Bassa
Confirmation: Mufti Ebrahim Desai
(Islamic rulings on this Q&A newsletter are answered in accordance to the Hanafi Fiqh)
Jamiatul Ulama (KZN)
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