Fatwa ID: 01316
Answered by Mufti Abdullah al-Ma’mun
Assalamu alaykum Mufti Sahib, I am a retired pensioner who was an admin staff in the Ford finance Company and was processing applications for finance for customers who wanted to buy cars on finance. Our office was paying the dealer and then the customer made monthly payments to us which included interest.
- Was my earning halal and is the eventual pension halal?
- I have a mortgage to pay, so would it be possible for me to use the pension fund to pay off the interest element of my remaining mortgage or the student loan of my son? If not I will dispose my pension fund to an orphanage or cancer charity.
- I will also be paid £200 approx. per month till I die (It will be paid from the Ford salaried contributory pension fund), then after my death the reduced monthly payment will go to my nominated person. Is this money halal and can I give it to my son?
May Allah reward you for your efforts and reply – JazakAllah
In the name of Allah, the most Beneficent, the most Merciful.
The salary paid by financing companies that deal with interest is unlawful (haram) due to the clear verses stated in the Quran with regards to the illegality of interest in Islam.
Allah Ta'aala says: “Allah has allowed (made Halal) trading and forbidden (made Haram) usury”
Rasulullah Sallallahu alaihi wa Sallam is reported to have said: “Allah Ta'aala has invoked curse (la’na) on the receiver of interest, the payer of interest, the witness and the scribe.”
(Musnad Ahmed ibn Hanbal no: 3725)
The eventual pension will also be unlawful due to the fact that in a pension the government or the employer by law deducts a certain amount from that very salary which is mixed with interest, every month or year which the employee later receives during his retirement. Therefore such payments cannot be taken as wages and is not deemed Halal.
The way to dispose of interest money is that it must be given away as charity without the intention of thawaab (reward). Mufti Taqi Uthmani states with regards to interest money that has been generated in a Muslim person’s name through channels they do not control:
“….. In non-Muslim countries, he can receive the amount of interest with a clear intention that he will not use this amount for his personal benefit. In this case it is incumbent upon him to give this amount as Sadaqah (charity) to the poor who do not have the Nisab of Zakah. This is not the normal Sadaqah which a Muslim gives out of his lawful income with an intention to get reward in the hereafter. Instead, this Sadaqah is meant only for disposing off unclean and unlawful money, and to relieve oneself from the burden of an ill-gotten gain. But it should be remembered that this amount is unclean only for the person who has received it as interest. The poor persons who will get it from him as Sadaqah can use this amount for their personal benefits.”
(Contemporary Fatawaa, p242)
From the above we can deduce that the salary earned through the financing company cannot be used to pay off the interest element of your remaining mortgage or the student loan of your son as these are uses that are beneficial to you. You can however, dispose your pension fund to an orphanage or cancer charity.
The same rule applies to the 'Ford salaried contributory pension fund' due to the reasons mentioned above. In other words; personal benefit cannot be taken from it hence it cannot be given to your son. It must be disposed of in accordance to answer number two above.
Only Allah Knows Best
Written by Mufti Abdullah al-Ma’mun
Checked and approved by Mufti Mohammed Tosir Miah
Darul Ifta Birmingham.