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Provident Fund Payout

Answered as per Hanafi Fiqh by Mahmoodiyah

Question:

Assalamualaikum

I was employed in the motor industry, the owner of the enterprise being a Muslim. Being part of the motor industry, the enterprise concerned belonged to a union. Being part of the union it was compulsory to take membership of a provident fund. The only exclusion to this membership were owners of the enterprise (members of CC or directors of PTY Ltd). I have now left this job and resigned from the provident fund. In terms of Shari’ah what is the ruling to the following scenario:

Figures used are not the actual, but rather used for illustrative purposes.

I contributed R10,000-00 to the provident fund during my employment.

The enterprise contributed R12,000-00 on my part to the provident fund.

The total contribution to the fund being R22,000-00.

On resignation from the fund I am informed by the union that I will receive R30,000-00 before being taxed.

What am I entitled to receive?

Am I entitled to the difference of R8,000-00? If no, can I use this R8,000-00 to settle the tax due to SARS?

If there is any further information that you may require please contact me on the email address listed below.

Jazakallah


Answer:

 

                  

 

If the Union itself is giving you R30 000 from their own accounts then you may take the whole amount.  The difference of R8000 will be lawful for you to use. You may use this money in whichever way you deem fit.

And Allah Ta’ala knows best

Mufti Muhammad Ashraf

Darul Iftaa

Jameah Mahmoodiyah

Springs

                  

31 January 2007

11 Muharram 1428

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