Ibn Majah

Benefits and Issues:

➊ The wealth that is given as zakat or charity, once it leaves the possession of the giver, its status changes.

➋ Those individuals who are assigned by the Islamic government to collect and distribute zakat should be given the right to compensation for their efforts.

➌ A person engaged in religious work should be given an appropriate salary or stipend; this is an obligation of the Islamic society, which, in the case of an established Islamic government, is fulfilled through the public treasury (bayt al-mal). Otherwise, ordinary Muslims themselves should fulfill this obligation.

➍ The defense of the Islamic state is also an important expenditure from zakat and charity. This includes the salaries of soldiers, provision of necessary weapons for them, and the expenses of their training.

➎ If an eligible recipient is given an animal (such as a camel, goat, etc.) or gold or silver jewelry as zakat, he may sell it. For the buyer, that item will not be considered zakat property. However, the one who gave the charity cannot buy back the item from the recipient that he gave as charity. (Sahih al-Bukhari, Zakat, Chapter: Is it permissible to buy back one’s charity? And there is no harm in buying the charity of someone else..., Hadith: 1489).

➏ If a poor person gives a gift to a wealthy person, there is no need to investigate whether he received that item as charity or by some other means. For the recipient of the gift, its status is not that of charity, so there is no harm in accepting it.

➐ The bankrupt (gharim) can refer to a person who has so much debt that he is unable to pay it, and his possessions are not sufficient that, if sold, the debt could be paid off. It can also refer to a person who has guaranteed someone’s debt, and the debtor refused to pay at the appointed time or absconded, thus the guarantor had to pay the amount. Similarly, if someone becomes destitute due to an accident, for example: someone bought the fruit of an orchard, but a storm destroyed the fruit and the amount remained due upon him—such a person’s loss can also be compensated from zakat and charity. There can be other such cases as well; all of them are included in the term “gharim.”

1635. Commentary: The meaning of (ghārim) is generally taken as "debtor." However, to translate it as "debtor" in every context is not correct. In some places, it does indeed mean "debtor." But here, its meaning is "the one who pays off a settlement (chatti bharne wale ke hain)." That is, if a wealthy person, for the sake of ending discord and mischief and reconciling between two people, takes on the responsibility of paying an amount on behalf of one party, and then he himself has to pay that amount, then it is permissible for such a person of means to pay this settlement (compensation) amount from the wealth of zakat.

As for the issue of the debtor—whether he is eligible for zakat or not—its explanation is as follows: If the reconciler has taken a loan and given the amount to the other party so that the dispute may end, then this debtor (even though he is a person of means) falls under the definition of ghārim mentioned in this hadith. Apart from this, there is another type of debtor: one who takes a loan for his personal needs, but due to hardship is unable to repay it. This hadith does not mention such a person. However, such a person will be counted among the poor (fuqarā’) and will be eligible for zakat. It will be correct to pay off his debt from zakat funds.

Lexical Explanation 520:
لِغَنِیٍّ: "Ghani" refers to one who possesses one uqiyyah or has enough food that suffices him for the morning and evening.
لِعَامِلٍ عَلَیْهَا: By "amil" is meant the agent or collector who works for the collection of charity, for example: the one who gathers it, keeps accounts, or writes records. It is permissible for him to take compensation for his work, even if he himself is wealthy.
غَارِم: Debtor, one who is in debt. According to one opinion, this refers to someone who takes a loan for the purpose of reconciling mutual rivalry and enmity, or if some burden has befallen him and he takes a loan to remove it. As for taking a loan for personal needs, if he does not have the ability or means to repay it, then he will be included among the poor (fuqara), and if he has the ability, then he will be considered wealthy (ghani), due to which it is not permissible for him to take charity.

Benefits and Issues 520:
➊ This hadith proves that it is not permissible for a wealthy person (ghani) to take zakat.
2. Who is considered wealthy (ghani)? There are differing opinions among the scholars regarding its definition.
It is mentioned in Abu Dawud that the Messenger of Allah (sallallahu alayhi wa sallam) was asked: Who is ghani? He (sallallahu alayhi wa sallam) replied: "The one who has enough that he can live on for the morning and evening." [سنن ابي داؤد ، الزكاة ، باب من يعطي من الصدقة وحد الغني ، حديث : 1629]
And in Sunan al-Nasa'i, it is narrated from Abu Sa'id (radi Allahu anhu) that "Whoever possesses one uqiyyah, yet still begs, then he has clung and persisted in begging," meaning he has asked insistently.