Pension and unemployment funds

Answered according to Hanafi Fiqh by

Q: Is it haraam to earn a pension fund and to draw unemployment fund which was partly contributed from your own salary and partly from the company you work at?


A: The pension fund is a riba based scheme. If one had invested his wealth in the pension fund or the money was invested on his behalf with his consent, then in both cases, apart from the capital amount invested, the returns will be haraam. The returns will have to be given in charity without the intention of receiving any reward. However if the money was invested by the company without one’s consent (e.g. it was mandatory in one’s contract), then the money received through the pension fund will be permissible.

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


Answered by:

Mufti Zakaria Makada

Checked & Approved:

Mufti Ebrahim Salejee (Isipingo Beach)

This answer was collected from, where the questions have been answered by Mufti Zakaria Makada (Hafizahullah), who is currently a senior lecturer in the science of Hadith and Fiqh at Madrasah Ta’leemuddeen, Isipingo Beach, South Africa.

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