EPF as Trust Fund for Dependants

Letter to the Editor
EPF as Trust Fund for Dependants
20 February 2003

Sisters in Islam (SIS) welcomes the move to look into ways to improve the implementation of the Employees Provident Funds (EPF) and the setting up of a special committee chaired by Minister in the Prime Minister’s Department Datuk Seri Datuk Rais Yatim to study the matter (NST February 20, 2003).

However, SIS believes that the study should not be confined to methods of implementation but include the wider issue of the very nature, concept and purpose of provident funds such as the EPF. It should not be assumed that EPF funds should automatically be regarded as part of the deceased estate (harta pusaka) that would, in the case of Muslims, have to be distributed under the faraid inheritance. In some Muslim Middle Eastern countries such as Egypt, provident funds are regarded in the nature of trust funds (amanah) or endowment funds (waqaf) intended for the benefit of dependants.

Justice as central to Syariah

Justice is a central notion of the syariah in its broader sense. The syariah principles relating to property, funds and income are not limited to the system of the faraid rules of inheritance. Besides the faraid inheritance system, the syariah also provides for other concepts such as wasiyah (testamentary disposition by will), waqaf (endowment) amanah (trust) and hibah (gift).  There are even variations in the faraid system itself among the scholars (ulama’) of the Shafi’i, Hanafi , Maliki, and Hanbali schools, as well as with the Ja’fari school. In many Middle Eastern Muslim countries, there is now a tendency among the scholars to consider the various views of the schools as a whole, in order to provide for the flexibility needed in the interest of justice. For instance, many of those scholars have now recognized testamentary bequests that are made in favour of certain heirs i.e. to adjust the shares of the heirs, and have abandoned the view that testamentary bequests made in favour of an heir are invalid. Islamic jurisprudence is not rigid, and the principles of ijtihad (juristic reasoning) and istihsan (juristic preference), have been recognized as a means of finding just and fair solutions to emerging problems. The diversity of legal opinions in classical Islamic jurisprudence demonstrates the dynamism of Islamic law in those days. To review the various fiqh rules to ensure justice in present-day society would, therefore, be in accordance with the traditions of the Islamic intellectual and juristic heritage. The syariah generally contains broad-based principles of divine law, while the detailed rules (fiqh) have been worked out through human interpretations and understandings.

Application of various concepts e.g. amanah, waqaf, hibah

It is therefore proposed that firstly, a distinction should be clarified between the properties which would form the deceased Muslim’s estate (pusaka), and the provident funds for maintenance (tabung amanah untuk nafkah) which are not actually property but has been set aside in the interests of the deceased in old age and his immediate dependants. The concept of harta sepencarian (matrimonial assets) is also relevant as part of the deceased’s property may in fact be harta sepencarian and should not form part of the pusaka. Secondly, a distinction should be clarified between heirs (waris) for the pusaka, and dependants (orang tanggungan) for the maintenance funds. The application of such concepts regarding amanah (trust), waqaf (endowment), hibah (gift) should also be considered in relation to provisions or funds for maintenance.

An analogy may also be drawn with the concept of dependants as it is applied in the law on pensions i.e. regarding pension rights for widow, widower and children. However, SIS is concerned with the possible discriminatory effect of selective gender neutral provisions which, due to certain other factors, have the effect of discriminating against Muslim women Unlike the civil law for non-Muslims which has now abolished polygamy and unequal distribution of inheritance between men and women, the Muslims have to take into consideration the issues of polygamy and the unequal distribution of inheritance.

Polygamy and Harta Sepencarian

The law allows a Muslim man to have more than one wife, up to a maximum of four, but the Qur’an, in Surah an-Nisa’ 4 : 3, emphasizes that polygamy may only be practised if it does not bring injustice to the women involved. Justice (‘adl) does not necessarily mean equality between the wives for it would in fact be unjust if the first wife can only receive the same amount of maintenance as the subsequent wife or wives. The financial rights of the first wife should be given the greatest consideration in polygamous marriages, as in many cases in these days the husband had married the first wife when he was comparatively poor and then when he becomes wealthy, he marries another woman. The concept of a wife’s share of harta sepencarian should also be relevant as wives in long-term marriages should justly be entitled to a larger share. The distribution of harta sepencarian should not be limited to divorced wives, as widows should also be entitled to claim harta sepencarian

The Islamic Family Law Act now applies gender-neutral language regarding the claim for harta sepencarian. However, it is submitted that this type of gender-neutrality is in fact unjust to women, as other provisions of the Islamic Family Law, unlike the civil law for non-Muslims, are not gender-neutral. Therefore it would be improper and unjust to give the Muslim husband equal rights to his wife or wives’ EPF funds, as the husband in polygamous marriages would be able to benefit from the EPF funds of all his wives.


Therefore, it would be proper and desirable if the concept of dependants for the maintenance funds should be understood in accordance with Islamic principles. A Muslim man’s wife and children are his main dependants, but a Muslim woman’s husband is not her dependant. It is a man’s responsibility to provide for the maintenance of his wife and children. This concept of “maintenance funds for dependants” could be applied for making it compulsory for a deceased man’s EPF funds to be used mainly for the benefit of his wife and children. On the other hand, in the case of a woman, since her husband is not her dependant, the EPF funds should be used mainly for the benefit of her dependant children, and perhaps, of her aged parents, in cases where the woman has been contributing towards their financial support. It might also be pointed out that there might be a few individual cases where the funds available would be more than sufficient for reasonable provision to be made for the man’s wife and children, but he had also left aged parents who are in need of financial support. There might even be a few individual cases where it would be just for some provision to be made for the woman’s husband It is further proposed that in such situations a certain discretion and flexibility may be necessary to deal with the individual circumstances of the families to ensure that justice is done.

Understanding concept of faraid

Regarding the faraid rules of inheritance, it is unfortunate that the present administration of the syariah laws on inheritance emphasize the provision that male heirs be given a double share, without emphasizing on the rationale for this rule — that the man has the legal responsibility to provide maintenance for the family, and thus every female should always have a man to provide for her needs, be he a father, a brother, a husband or a son. In today’s society, however, many women have to earn a living and contribute towards the family needs. Moreover, divorced or widowed mothers often have to provide for their children’s needs without assistance from the ex-husband or other male relative. There is no mechanism in the present legal system for women to obtain the redress that would reflect on the balance and justice that was originally intended by the syariah. In the past, the concept of men receiving a greater share in inheritance was not a feature that was special to Islamic law. For instance, the Distribution Act 1958 for non-Muslims previously provided that the husband of a deceased woman would receive the whole of her estate, while the wife of a deceased man would only receive one third of his estate if he had children, or one half if he had no children. However, this discrimination against non-Muslim women has been removed in the 1990s with the amendment to the Distribution Act.

In fact, from the historical perspective of the syariah, the introduction of the faraid itself was intended in the interests of women and for the benefit of women. The then existing system in pre-Islamic Arabia totally excluded women from any automatic share in inheritance, and only male members of the family were considered to have the right of inheritance. Some women were even considered to form part of the deceased’s property and could be “inherited” by his male heirs! The introduction of the faraid, giving women the right to inherit property was a revolutionary reform introduced by the Qur’an and Sunnah. It would surely have been too revolutionary in those socio-historical circumstances if the men were to be told that women were not only entitled to inherit, but were entitled to inherit shares that were equal to the men’s shares. It is unfortunate that nowadays, misconceptions regarding the faraid provision, like the misconceptions regarding polygamy in Islam, has led members of our ‘ummah to look upon both polygamy and men’s double inheritance as God-given rights conferred upon Muslim men, instead of as God-given limitations upon male rights that were conferred by the pre-Islamic society.


In order to ensure that justice be done to Muslims in general and Muslim women in particular, various concepts on property, financial rights and responsibilities need to be considered as an integrated whole. Islamic fiqh is not meant to be narrow and rigid, nor is the law of property confined to the single concept of pusaka and faraid.