After the battles of Yermuk and Qadisiyya the Muslims won heavy spoils. The coffers at Madina became full to the brim and the problem before Umar was as to what should be done with this money. Some one suggested that money should be kept in the treasury for the purposes of public expenditure only. This view was not acceptable to the general body of the Muslims. Concensus was reached on the point that whatever was received during a year should be distributed.
The next question that arose for consideration was as to what system should be adopted for distribution. One suggestion was that it should be distributed on ad hoc basis and whatever was received should be equally distributed. Against this view it was felt that as the spoils were considerable that would make the people very rich. It was therefore decided that instead of ad hoc division the amount of the allowance to the stipend should be determined before hand and this allowance should be paid to the person concerned regardless of the amount of the spoils. This was agreed to.
About the fixation of the allowance there were two opinions. There were some who held that the amount of the allowance for all Muslims should be the same. Umar did not agree with this view. He held that the allowance should be graded according to one's merit with reference to Islam.
Then the question arose as to what basis should be used for placing some above others. Suggested that a start should be made with the Caliph and he should get the highest allowance. Umar rejected the proposal and decided to start with the clan of the Holy Prophet.
Umar set up a Committee to compile a list of persons in nearness to the Holy Prophet. The Committee produced the list clan wise. Bani Hashim appeared as the first clan. Then the clan of Abu Bakr was put and in the third place the clan of Umar was put. Umar accepted the first two placements but delegated his clan lower down in the scale with reference to nearness in relationship to the Holy Prophet.
The members of the clan of Umar objected to the order of Umar but he rebuked them saying; "You desire that you should stand on my neck and deprive me of my good deeds. I cannot permit that."
In the final scale of allowance that was approved by Umar the main provisions were:
(1) The widows of the Holy Prophet received 12,000 dirhams each;
(2) Abbas the uncle of the Holy Prophet received an annual allowance of 7,000 dirhams;
(3) The grandsons of the Holy Prophet Hasan and Hussain got S,OOO dirhams each;
(4) The veterans of Badr got an allowance of 6,000 dirhams each;
(5) Those who had become Muslims by the time of the Hudaibiya pact got 4,000 dirhams each;
(6) Those who became Muslims at the time of the conquest of Mecca got 3,000 dirhams each;
(7) The veterans of the apostasy wars got 3,000 dirhams each.
(8) The veterans of Yermuk and Qadisiyya got 2,000 dirhams each! In announcing this scale Umar said:
"I have decided the scale according to merit by entry into Islam and not by position."
In this award Umar's son Abdullah got an allowance of 3,000 dirhams. On the other hand Usama got 4,000. Abdullah objected to this distinction and Umar said:
"I have given Usama more than you because he was dearer to the Holy Prophet than you and his father was dearer to the Holy Prophet than your father."