Is Sweden’s A-Kassa Unemployment Model Permissible?

Answered by Shaykh Muhammad Carr

Question

In Sweden, you pay a small monthly fee to an unemployment fund (A-kassa). If you lose your job, you can receive financial support for a limited period while actively seeking work.

To qualify, you generally must have worked at least 60 hours per month for 6 of the last 12 months and have been a paying member for at least 12 months. You must also report your job applications to the Public Employment Service (Arbetsförmedlingen) each month and fulfill the job-seeking requirements.

Answer

In the Name of Allah, the Most Merciful and Compassionate.

Thank you for reaching out and seeking clarification on this important matter. I understand your concerns, and it’s commendable that you seek to ensure that your policy aligns with Islamic principles.

Allah says,

“And cooperate in goodness and righteousness, and do not cooperate in sin and transgression. And be mindful of Allah. Surely Allah is severe in punishment.” [Quran, 5:2]

You can benefit from them without any reservations. The A-Kassa fund functions as a cooperative or mutual fund, meaning its structure complies with Shari’a. Additionally, the fund is not intended to maximize profits. [Refer to The Rules of the Open Unemployment Fund A-Kassa]

You would deem your benefits to come from the contributions made in solidarity to the fund instead of any potential impermissible revenue. A more precautionary approach would be to deduct the percentage of non-permissible income to total income from the benefit that you receive.

A-Kassa Structure

The A-kassa operates as a mutual responsibility-based community, which is a form of a solidarity-based fund. The main objective of this type of fund is to provide statutory unemployment benefits to its members in accordance with applicable laws. In essence, members contribute to the fund, which provides unemployment benefits to those in need, based on mutual responsibility and shared contributions.

This mutuality means that the fund functions on the principle that its members collectively bear the responsibility for supporting each other in times of unemployment, as opposed to relying solely on government provisions. It is a cooperative arrangement where each member’s membership is essential for the fund’s operation, and they are expected to adhere to the rules, such as paying membership fees, to maintain their eligibility for benefits. [Ibid]

Insurance—Shari‘a Perspective

Insurance, defined as implementing measures to protect against potential future risks or hazards, is firmly grounded in Sharia law. Just as risk is an inherent aspect of daily life, safeguarding ourselves against such risks is equally natural and normal.

The crucial aspect lies in the method used to address these risks. Contemporary scholars generally agree that cooperative insurance, based on the Takaful model, is permissible.

Cooperative insurance occurs when a group of individuals mutually assist each other by contributing to a fund to compensate for the loss or damage caused by a hazard that could affect any one of them. [Karan, Medical Insurance]

A group of persons enters into a partnership; each individual contributes a specified amount; whoever is afflicted by any calamity is assisted from this collective fund; thus, each individual is considered an insurer and insured. [Ibid.]

The nature and relationship between the contracting parties are the most important aspects of cooperative insurance, most notably distinguishing it from commercial insurance. In a cooperative format, as stated previously, the legal roles of the customer and owner are united in one form: “members.”

Proofs

The well-documented story of Yusuf (Allah grant him peace) serves as one of the most prominent examples of safeguarding against potential hazards and risks. Allah recounts,

“He said, ‘You are to diligently sow for seven hard years, and whatever you reap leave in its ear, save for a little from which you eat. Then just after that shall come seven unsparingly dire years that devour all you have put up for them, save a little you keep for seed.’” [Quran, 12:47-48]

Additionally, a tradition attributed to the Ash‘ariyyin reads:

“The Ash‘ariyyin, when at war or residing and their provisions ran short, would pool their resources and divide them equally.” [Bukhari]

From this tradition, we can derive the following:

• The explicit approval of the Prophet (Allah bless him and grant him peace) is evident in his statement, “I am from them, and they are from me.”
• The tradition indicates that they pooled their resources without specifying any particular amounts, suggesting that contributions varied.
• Despite differing contributions, they divided the pooled resources equally, resulting in some receiving more than they contributed and others receiving less.
• The cooperative objective described in the tradition overlooks the element of riba.

I pray this is of benefit and that Allah guides us all.
[Shaykh] Muhammad Carr
Checked and Approved by Shaykh Faraz Rabbani

Shaykh Muhammad Carr has dedicated his life to studying and transmitting our beautiful deen. His studies have taken him around the globe, where he has benefitted from many luminaries. Under the guidance of his teachers – Shaykh Taha Karan, Shaykh Yaseen Abbas, Shaykh Muadh Ali, and many others – Shaykh Muhammad has grown to appreciate the beauty and benefits of diverse scholarship. He completed his memorization of the Qur’an at Dar al-Ulum Zakariyyah in September 1997 and received an Alimiyya Degree in 2006 from DUAI (Darul Ulum al-Arabiyyah al-Islamiyyah). He is also affiliated with Masjid Auwal in Bo Kaap, Cape Town (the oldest mosque in South Africa), where he serves as a co-imam, and Dar Al-Safa, where he has taught since 2018. As a teacher, he imparts the wisdom of our heritage and tradition by opening the door to students. As an imam, he has the unique opportunity to serve his community in daily life.

In addition to his roles as a teacher and imam, Shaykh Muhammad Carr has contributed significantly to the administrative and advisory aspects of Islamic institutions. Since 2023, he has served as the Administrative Director at The Imam Kurani Institute, contributing to the institution’s growth and development. He continues to pursue traditional Islamic Sciences, possessing a keen interest in Islamic Contract Law and Finance. Shaykh Muhammad has been a Shari‘a Board Member for Islamic Asset Management & Insurance Companies since 2001, aligning financial practices with Islamic principles.