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The faqir (poor) has been described literally as such: “One whose backbone has been broken; the miskin is the same as the faqir, except for the fact that the miskin has a worse condition.”
In Islamic terms, faqir refers to a person who doesn’t have enough to cover a year’s worth of his expenditures. If a person has land or any assets that can be used for expenses, he won't be considered a faqir.
Regarding the issue of Zakat, the Holy Quran says: “Charities are only for the poor and the needy, and those employed to collect them, and those whose hearts are to be reconciled, and for [the freedom of] the slaves and the debtors, and in the way of Allah, and for the traveller. [This is] an ordinance from Allah, and Allah is all-knowing, all-wise.”
As for where Zakat money must be spent, the Grand Ayatullahs have said:
“Zakat can be spent for the following eight purposes:
a) It may be given to poor person, who does not possess actual or potential means to meet his own expenses, as well as that of his family for a period of one year. However, a person who has an industry or possesses property or capital to meet his expenses, is not classified as poor.
b) It may be paid to a miskin (a destitute person) who leads a harder life than a Faqir (a poor person).
c) It can be given to a person who is a Wakil of the Holy Imam (A.S.) or his representative to collect Zakat, to keep it in safe custody, to maintain its accounts and to deliver it to the Imam or his representative or to the poor.
d) It can be given to those non-Muslims who may, as a result, be inclined to Islam, or may assist the Muslims with the Zakat for fighting against the enemies.
e) It can be spent to purchase slaves to set them free.
f) It can be given to an indebted person who is unable to repay his debt.
g) It may be spent in the way of Allah for things which have common benefit to the Muslims in any way.
h) It may be given to a stranded traveler.”
On this basis, Islam has introduced those purposes for which the Zakat can be disposed for; the poor and the destitute being some of them.
Another one of the groups that the money can be spent on are the non-Muslims who will find an incline towards Islam if they are granted from it.
Regarding paying non-Muslims of this money, Islamic scholars have said: “Paying Zakat to non-Muslims who will be inclined towards Islam or will help the Muslims in the case of possible wars is permissible.”
 Mahmoud Abdul-Rahman, Mu’jamul-Mustalahat wal-Alfadhil-Fiqhiyyah, vol. 3, pp. 50-51.
 Seyyid Muhammad Kadhim Ha’iri Yazdi, Al-Urwatul-Wuthqa, vol. 4, pg. 99.
 Tawdihul-Masa’el (annotated by Imam Khomeini), vol. 2, pg. 141.
 Mohammad Ali Araki, Al-Masailul-Wadihah, vol. 1, pg. 334.