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Pension Fund and Zakaat

Answered as per Hanafi Fiqh by Askmufti.co.za

Q: I am a government employee. I have a pension scheme which is in its 8th year. Is zakat payable on it now or when I get it during retirement?

A. Zakaat will be payable on the pension money AFTER it comes into your possession and not while it is still in the scheme. If you were paying Zakaat previously (on other assets in your possession), you will add the money received from the pension fund to your other assets and pay Zakaat on the whole amount on the date Zakaat is due.

If you were not paying Zakaat before this because Zakaat was not Fardh on you, then you will only pay Zakaat on the pension fund after it has been in your possession for 12 Islamic months.

Allah Ta’aala knows best. 

Moulana Yusuf Laher
Checked by: Mufti Siraj Desai

This answer was collected from AskMufti.co.za, which is operated under the supervision of Mufti Siraj Desai of Darul-Uloom Abubakr, South Africa.

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