Issue in Zakat KWSP

The National Fatwa Committee of the Islamic Religious Affairs Malaysia was the 5th
meeting held on 16-17 Feb1982 have discussed this issue. Dialogue has been decided
that the money from the Employees Provident Fund (EPF) by the Muslim employees
are required to be counted when sufficient duration (haul) one year after its adoption by
Shafi sect. After that, in 2001, the Selangor Fatwa Committee has made a decision with
respect to the EPF Zakat payment methods as follows.

i) Upon receipt of the EPF money, one must wait a year to haul enough then can
be counted by 2.5% or

ii) Upon receipt of the EPF money, a person may continue to be issued zakat 2.5%
without waiting for a year for fear the money will be diminished in terms nisab that no
longer subject to zakat.

Then in 2007, a new fatwa was decided as a continuation of the fatwa issued in 2001
and they have decided that:

"EPF Contributors are encouraged to pay zakat immediately after receive or

withdraw money if the EPF is enough the nisab, without having to wait for a year for
haul.

The meaning of EPF money is money from one's income as a result of his work that is
stored in the Savings Account for employees covered under the EPF Act. EPF is should
be counted as Zakat because the concept is the same as saving money, but its
difference is EPF savings can not be withdrawn arbitrarily like a regular savings account.
This money can only be withdrawn in part by the contributor when it has reached a
certain age in the period of service or take a whole when he has reached retirement age.
Apart from production based on age, it can also be removed after fulfilling the
requirements under the various EPF withdrawal scheme.

The conditions required for the issue zakat is Islam (the property owner), independent
(not worshipers hostage), nisab (fixed rate), the haul (one year), and a perfect property.
There are three types of production in the EPF. First, before the age of compulsory
expenditure incurred for purposes such as the production needs to resolve outstanding
housing loans, education spending, health spending, buy a house and expenses for Hajj.
Second, the production at the age of 50 years for both EPF account. Currently,
depositors were allowed to withdraw part or all of the deposits in both accounts. Third,
the production at the age of compulsory retirement at 55 years. At this time, a depositor
may withdraw part or all of the money spent in KWSP.

The first question, whether the compulsory EPF money for zakat. EPF money are
obligatory for zakat as if it was already in the hands of its contributors (or pre-owned
uninterruptedly). If the money is still in your EPF savings, it is not required to be counted
because of the lack of a requirement that is not a perfect for the money possession to
condescend. However, if money is to be issued for the purpose of housing or education,
the money can be spent at the age of 50 or 55 years old at this point, is pretty much
perfect all compulsory zakat (a perfect possession) and contributors are obliged to pay
zakat to the EPF money.

The second question of how long to pay zakat, zakat is to be removed must wait for a
year or not. So to answer this issue, we need to see the state of the money in advance.
This is because the money obtained from EPF included in an item of property or
proceeds referred to as the income (mal al mustafad). So, property income has been a
mistake from among jurists of the status haul. Therefore, looking at the practices of the
people of Malaysia and Selangor in general, income property should be removed shortly
after it was acquired and Zakat during the year it was acquired without having to wait up
to a year owned (no need to haul).

The third question in this issue is how to calculate Zakat EPF. To calculate the amount
of zakat that should be removed, we need to consider three forms of production above.
First, the purpose of the money is removed for specific needs such as housing,
education or production pilgrimage. In this case, zakat still need to be imposed on the
amount of spending money unless production is an urgent need to seek treatment as
the cost is very high. For example, in 2012 issued a RM3,500 EPF money to buy a
laptop and RM5,000 for paying home installments.So,the total spending is RM8,500
and need to mix money with other income such as salary during the year as well. Once
mixed RM8,500 + RM36,000 ( payment) = RM44,000, the amount has more than nisab,
he should pay zakat as much as 2.5%. However, in the same year, suddenly had to
withdraw RM40,000 with KWSP money to cover the cost of surgery in hospitals that
costing RM50,000. So, in this case, should not be counted because desperate and the
KWSP is not enough to cover up into debt or seek help from others.

Second, the age has reached 50 years old and already can withdraw all the money in
the account is both without any obstacles, then this point whether the money is spent or
not, the EPF money was rightfully his (a perfect possession) be required upon him for
zakat.

Third, at the age of 50-55 years, whether issued or not his money from the EPF, it was
her duty to pay zakat on his savings in the EPF. If the age of 50 years, zakat is
compulsory imposed on all his savings in the Account. If the age of 55 years and above,
then zakat is charged on all his savings in the EPF.