Firstly: 

The institution of social security in the land of the Two Holy Sanctuaries is an institution that helps the poor and needy and offers help to them. It is a non-profit government institution, unlike the social security bodies in other countries. 

It is permissible for the one who is in need and who meets the conditions stipulated by the state for the one who is entitled to benefit from the wealth of social security to benefit from it and to take the money that the state gives to him, even if he is one of the descendants of the family of the Prophet (blessings and peace of Allah be upon him). Rather what is forbidden in their case is taking money from the obligatory zakaah, but not from voluntary charity. 

Shaykh ‘Abd al-‘Azeez ibn Baaz (may Allah have mercy on him) was asked: 

We are a family of moderate means and we are descended from the family of the Messenger of Allah (blessings and peace of Allah be upon him). We have documents to prove that. My father has reached the age of sixty, and the conditions for receiving social security apply to him. We have asked our father to make use of social security, but he refused because there is a hadeeth from the Messenger (blessings and peace of Allah be upon him) stating that zakaah and charity should not be given to members of his household. My question is: Is social security regarded as coming under the same rulings as charity or not? 

He replied: 

If your father meets the conditions with regard who may benefit from social security, then it is permissible for him to take it because it is help from the bayt al-maal (treasury) for the poor who meet the required conditions. It is not zakaah according to the Department that is responsible for that. End quote. 

Fataawa al-Shaykh Ibn Baaz, 14/315 

Shaykh Muhammad ibn Saalih al-‘Uthaymeen (may Allah be pleased with him) was asked: 

We can trace our lineage back to Banu Haashim, and among our family are those who are wanting, poor and needy; in fact they are among the poorest of people and they do not have any income except social security for disability and old age only. Is it permissible to give them charity, whether this charity comes from a fellow Haashimi or otherwise? What is the ruling if I give something to them? 

He replied: 

If the charity is voluntary charity, then it may be given to them and there is nothing wrong with that. But if it is obligatory charity [i.e., zakaah], then it should not be given to them, because the Prophet (blessings and peace of Allah be upon him) said: “Rather it is the dross of the people.” And Banu Haashim have been honoured by Allah, may He be glorified and exalted, in such a way that they should not take the dross of the people. But with regard to voluntary charity, it is not regarded as dross or filth, and there is no doubt that it expiates sin, but it is not like obligatory zakaah. Hence many scholars are of the view that they may be given voluntary charity but they may not be given obligatory charity. End quote. 

Majmoo‘ Fataawa al-Shaykh Ibn ‘Uthaymeen, 18/answer to question number 613. 

In fact even zakaah may be given to descendants of the family of the Prophet (since and peace of Allah be upon him) in the event that they do not take a share of war booty, as is the case nowadays, on condition that they do not have any other source of income apart from zakaah. 

This has been discussed previously in the answer to question number 111802.