diff --git a/src/handlers/payout/action.ts b/src/handlers/payout/action.ts
index 3d92bee7e..3220f5773 100644
--- a/src/handlers/payout/action.ts
+++ b/src/handlers/payout/action.ts
@@ -3,6 +3,7 @@ import { getPenalty, getWalletAddress, getWalletMultiplier, removePenalty } from
 import { getBotConfig, getBotContext, getLogger } from "../../bindings";
 import {
   addLabelToIssue,
+  checkUserPermissionForRepoAndOrg,
   clearAllPriceLabelsOnIssue,
   deleteLabel,
   generatePermit2Signature,
@@ -34,6 +35,10 @@ export const handleIssueClosed = async () => {
 
   if (!issue) return;
 
+  const userHasPermission = await checkUserPermissionForRepoAndOrg(payload.sender.login, context);
+
+  if (!userHasPermission) return "Permit generation skipped because this issue has been closed by an external contributor.";
+
   const comments = await getAllIssueComments(issue.number);
 
   const wasReopened = await wasIssueReopened(issue.number);
diff --git a/src/helpers/issue.ts b/src/helpers/issue.ts
index 82e11a8d7..5127c1c6c 100644
--- a/src/helpers/issue.ts
+++ b/src/helpers/issue.ts
@@ -330,6 +330,49 @@ export const removeAssignees = async (issue_number: number, assignees: string[])
   }
 };
 
+export const checkUserPermissionForRepoAndOrg = async (username: string, context: Context): Promise<boolean> => {
+  const permissionForRepo = await checkUserPermissionForRepo(username, context);
+  const permissionForOrg = await checkUserPermissionForOrg(username, context);
+
+  return permissionForOrg || permissionForRepo;
+};
+
+export const checkUserPermissionForRepo = async (username: string, context: Context): Promise<boolean> => {
+  const logger = getLogger();
+  const payload = context.payload as Payload;
+
+  try {
+    const res = await context.octokit.rest.repos.checkCollaborator({
+      owner: payload.repository.owner.login,
+      repo: payload.repository.name,
+      username,
+    });
+
+    return res.status === 204;
+  } catch (e: unknown) {
+    logger.error(`Checking if user permisson for repo failed!, reason: ${e}`);
+    return false;
+  }
+};
+
+export const checkUserPermissionForOrg = async (username: string, context: Context): Promise<boolean> => {
+  const logger = getLogger();
+  const payload = context.payload as Payload;
+  if (!payload.organization) return false;
+
+  try {
+    const res = await context.octokit.rest.orgs.checkMembershipForUser({
+      org: payload.organization.login,
+      username,
+    });
+    // @ts-expect-error This looks like a bug in octokit. (https://github.com/octokit/rest.js/issues/188)
+    return res.status === 204;
+  } catch (e: unknown) {
+    logger.error(`Checking if user permisson for org failed!, reason: ${e}`);
+    return false;
+  }
+};
+
 export const getUserPermission = async (username: string, context: Context): Promise<string> => {
   const logger = getLogger();
   const payload = context.payload as Payload;