Government accounts that benefit enrolled employees

25-11-2004 | IslamWeb

Question:

The employer will open two accounts with government, when he recruits an employee in Sri Lanka. These are known as Employee Provident Fund (EPF) and Employee Trust Fund (ETF) this is a compulsory otherwise the employer will be prosecuted in the court of Law. Certain percentage will be taken from employee (9%) and certain percentage offered by the Employer (12%) at the end of maturity one will get a lump sum which of course include the interest. Our money is kept with government for which govt. paying an interest. Is this Haraam? If yes what we have to do with that interest money? Can we give those to the relatives who suffer with financial difficulties to settle loans?

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Answer:

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger. We ask Allaah to exalt his mention as well as that of his family and all his companions.

 

In principle it is not permissible to abide by this regime, but if the government made it compulsory, then it is permissible to abide by it due to necessity. However, when receiving the money along with the interests at the end of the service, one has to get rid of these interests by spending it in charitable fields, like giving it to a needy relative whom one is not obliged to spend on. So it is not permissible for a person to benefit from the interests of his own wealth, but the destitute, poor and needy people could benefit from it.   

Allaah knows best.