(Series of Answers by the Eminent Scholar Ata Bin Khalil Abu al-Rashtah, Ameer of Hizb ut-Tahrir, to the Questions of the Visitors of his Facebook Page "Fiqhi")
To: Khalid Abu al-Walid
Question:
May Allah bless you, our Sheikh, and may He protect and care for you... I have a question regarding this topic... Currently, I work for a private institution that deducts money from me for insurance and pensions. I want to take a portion of this money from the funds that were deducted from me, but they require me to take a percentage [deduction] from this amount which is my right... Is this permissible according to Shariah?
May Allah bless you and prolong your life.
Answer:
Walaikum Assalam Wa Rahmatullah Wa Barakatuh,
I understand from your question that you wish to accelerate a portion of your pension (retirement) entitlements before their scheduled maturity date as stipulated in your employment contract...
I see that this issue falls under the category of accelerating debt repayment; meaning, if a man owes a debt to another and the repayment date is after two years, for example—whether the repayment is in installments over two years or in a single lump sum after two years—and the creditor says to the debtor: "Pay me the amount now and I will reduce a known portion of it for you..." This is similar to your issue. You have an amount with the institution you work for, which they give to you when you reach the age of (60), for example, and you are currently forty and want a portion of these entitlements now, twenty years before their time.
The issue of accelerating debt repayment in exchange for reducing a portion of it—meaning, instead of the creditor taking the debt value of (1000) after a year, he takes (900) now—is an issue of scholarly disagreement... We have previously answered this in a response issued on 14 Safar 1434 AH - 27/12/2012 CE. I will repeat some of what was mentioned in that response that relates to this matter:
(...As for your question, it is known among the jurists as falling under the category of "Reduce and Hasten" (Da’ wa Ta’ajjal), meaning: reduce something from the deferred debt in exchange for paying the debt or part of it early... This issue is disagreed upon:
- Some do not permit it and rely on evidence including:
- What was narrated by al-Bayhaqi in his Sunan al-Kubra on the authority of al-Miqdad bin al-Aswad who said: I lent a man a hundred dinars, then my name came up in a dispatch sent by the Messenger of Allah ﷺ, so I said to him: "Hasten ninety dinars for me and I will drop ten dinars." He said: "Yes." This was mentioned to the Messenger of Allah ﷺ, and he said:
أَكَلْتَ رِباً يَا مِقْدَادُ، وَأَطْعَمْتَهُ
"You have consumed Riba, O Miqdad, and you have fed it [to others]."
(For information, Imam Ibn al-Qayyim said in Ighathat al-Lahfan: "In the chain of al-Bayhaqi's hadith, there is weakness").
- They said it is well known that the Riba of the Jahiliyyah was a deferred loan with a stipulated increase, where the increase was in exchange for increasing the term. Allah the Exalted invalidated and forbade it, saying:
وَإِنْ تُبْتُمْ فَلَكُمْ رُءُوسُ أَمْوَالِكُمْ
"But if you repent, you may have your principal." (QS. Al-Baqarah [2]: 279)
They added that discounting a portion of the debt in exchange for bringing the deadline closer is likewise Haram due to the compensation resulting from the time period, whether by increase or decrease.
The prohibition of this matter, "Reduce and Hasten," was voiced by the majority of jurists from the Hanafis, Malikis, Shafi'is, and Hanbalis; it was also disliked by Zaid bin Thabit, Ibn Umar, and a number of the Tabi'un.
- Others permit it and rely on evidence including:
- On the authority of Ibn Abbas (may Allah be pleased with them both) who said: When the Messenger of Allah ﷺ wanted to expel Banu al-Nadir, they said: "O Messenger of Allah, you have ordered our expulsion while people owe us debts that have not yet matured." He said:
ضَعُوا وَتَعَجَّلُوا
"Reduce [the debt] and hasten [the payment]." (Narrated by al-Hakim in his Mustadrak al-Sahihayn, and he said: "This hadith has a Sahih chain of narration though they [Bukhari and Muslim] did not record it.")
(For information, al-Dhahabi said in his Talkhis: "Zanji is weak and Abdul Aziz is not trustworthy." Ibn al-Qayyim said in Ahkam Ahl al-Dhimmah: "Its chain is Hasan [good]; there is no one in it [problematic] except Muslim bin Khalid al-Zanji, and his hadith does not fall below the rank of Hasan.")
- The saying of Abdullah bin Abbas (may Allah be pleased with them both): "Riba is only 'delay for me and I will increase for you,' it is not 'hasten for me and I will reduce for you.'"
The permissibility of this has been narrated from Ibn Abbas, al-Nakha’i, al-Hasan, and Ibn Sirin. It is a narration from Imam Ahmad and a view among the Shafi’is. It was the choice of Sheikh al-Islam Ibn Taymiyyah and his student Ibn al-Qayyim. Ibn Abidin among the Hanafi jurists also permitted it, as mentioned in his annotation on Al-Durr al-Mukhtar.
We do not wish to adopt (tabanni) an opinion on this matter; let the questioner follow the opinion of whichever jurists he feels tranquil with...) End quote.
As you can see, we do not wish to adopt a view on this; rather, you may follow the opinion of the mujtahid whose opinion you are convinced is correct... The two views are clear: the first view considers that accelerating the receipt of your right by reducing a portion of it is not permissible and is Riba... and the second view allows you to hasten taking your right or a portion of it by reducing something from it... and as I mentioned to you earlier, we do not wish to adopt one of the two opinions.
In conclusion, I ask Allah to open your heart to that which is good.
Your brother, Ata Bin Khalil Abu al-Rashtah
8 Dhu al-Qi'dah 1440 AH Corresponding to 11/07/2019 CE
Link to the answer from the Ameer's Facebook page: Facebook