Q: Are Muslims permitted to eat food bought from ḥarām income (such as money falsely claimed in government benefits)?
الجواب حامدًا و مصليًا و منه الصدق و الصواب
A: If one receives state benefits fraudulently the amount of excess benefit so received without entitlement must be returned to the state. If the excess benefit is pooled together with other permissible income, e.g., within the same bank account, and the latter forms the majority, then the claimant secures proprietary rights over the excess benefit despite the fraudulent nature of the claim. However, the claimant also incurs a debt for the same amount which remains payable to the state. Notwithstanding, it will be permissible for a Muslim to partake of food that is purchased with the combined income. If food is purchased using specifically the excess benefit of a fraudulent claim or the excess benefit is deposited in an account that receives only unlawful income or the majority received therein is unlawful, and the food is purchased from the pooled funds, then it will not be permissible to partake of the food.
And Allah knows best.
Mufti Mohammed Zubair Butt
Chair Al-Qalam Sharia Scholars Panel