Does Old Age or Illness Exempt from Zakat?

Short answer: No. Zakat is levied on wealth, not on a person's earning capacity — even if the owner is elderly, ill, a minor or mentally incapable, wealth completing nisab and hawl owes zakat. Concessions for inability apply to bodily worship like hajj; zakat is monetary worship, tied to the māl. Details: Note indeed that the poor and incapable are among zakat's recipients: a wealthy elder pays zakat while a poor earning-less elder receives it — the criterion is wealth, not age. Children should help their father reckon and pay; if he is legally incapable (dementia etc.), the guardian/agent pays from his wealth — exactly as a minor's guardian does. Withholding zakat for fear of future medical costs is not a valid excuse (see the marriage/medical fund fatwa). Evidence: Quran 9:103 (the duty attaches to wealth); Sahih al-Bukhari 1395 ('taken from their rich'); the athar of Umar (Muwatta) and the majority's principle of the guardian paying for the incapable. For complex individual cases, consult a qualified scholar.