Zakaat on retirement pension

Submitted by user2 on Tue, 2019-08-27 07:48

Q: If a pension is released to an employee at the time of retirement and according to statutory law you can only cash in 1/3 of it, while the remaining 2/3 has to be re-invested in a similar fund (money never coming into your hands of the retiree) directly being re-invested on behalf of the retiree to receive a monthly pension from the investment. What are the zakaat implications on the following:

1. Is zakaat payable on the 1/3, if the retiree opt to take the 1/3?

2. Is zakaat payable on the 1/3 if the retiree opt NOT to take the 1/3?

3. Is zakaat payable on the remaining portion of the reinvested amount?

4. Is zakaat payable on the monthly income derived from the re-invested amount?

A:

1. Yes.

2. Yes.

3. No.

4. Yes.

And Allah Ta'ala (الله تعالى) knows best.

Answered by:

Mufti Ebrahim Salejee (Isipingo Beach)

Category:

Zakaat›Factors that make Zakaat compulsory

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