Thank you for providing this service.
Is collecting social security in the United States Halaal? In this country, a small portion of our income is deducted from our paychecks. We do not have a choice in this. People can choose to collect monthly installments once they reach either 62 years of age or 67. They get a higher return if they apply for it at the age of 67.
I believe that this system is based on interest.
Whether it be social security in the United States or the old age benefits’ schemes in Pakistan, if the contract between the individual and the service providing agency expressly includes an element of interest, a Muslim should then avoid benefiting from it. However, if such is not the case, then an individual should take a decision keeping in view the details of the particular contract that is being offered and his own financial and social condition.
Generally speaking, social security and other old age or related benefit schemes can more accurately be compared to insurance rather than interest bearing investments.
However, in case the contract between the individual and the contracting agency expressly stipulates the amount of interest included in the benefits that shall accrue, a Muslim, if he can, should avoid using the element of interest on himself or his family. A simple means of such avoidance would be to deduct the amount of the interest element from such accrued benefits and not use this amount in meeting his personal or family expenses. This amount may be given away to any person or institute for utilization in any useful work.
On the other hand, if the contract does stipulate that an element of interest shall be included in the benefits, but does not give the exact amount of interest that shall be included in the accrued benefits, the individual, if he can, may estimate the amount of interest included in such benefits and deduct it from the accrued benefits, thereby avoiding to make use of the element of interest on his personal or family use.
Finally, if the contract does not stipulate that an element of interest shall be included in the benefits, then the individual may take advantage of the service without deducting any amount.
The above opinion is based on the fact that social security or old age benefit contributions, generally, are no longer at the choice of the concerned individuals. Most of the countries make mandatory deductions from the individual’s paychecks without giving the individual much choice. Furthermore, under the prevalent circumstances, the individual is not provided any other support in his old or inactive age except through such schemes. This situation combined with the fact that Islam has categorically prohibited Riba requires us to find a solution in which:
neither the individual is made to face extremely dire circumstances, which may force him into aversion toward Islam;
nor is any clear prohibition of Islam incorrectly made lawful.
It should, nevertheless, remain absolutely clear that the foregoing explanation entails my understanding and application of the directives of the Shari`ah on a relatively new practical-life situation, which is not directly covered by the Shari`ah. There can be a difference of opinion in such applications of the directives of the Shari`ah on newly evolving practical-life situations.
1st July 2000