The introduction of an Unemployment Insurance Scheme in the UAE from 1st January 2023 has been welcomed with open arms by locals and expats alike. The scheme was announced recently by the country’s Ministry of Human Resources and Emiratization (MoHRE) and is open to both UAE nationals and residents who work in the federal government and private sector.
It is hoped that the Unemployment Insurance Scheme will encourage businesses in the UAE to invest more heavily in achieving a competitive knowledge economy by attracting and retaining the best international talent.
What is the Unemployment Insurance Scheme?
This initiative aims to create a low-cost job safety net that supports employees in their professional journey, will provide up to three months of financial aid for unemployed citizens in the UAE. This income should cover essential expenses such as rent payments and basic necessities, allowing those affected to make ends meet while they look for employment opportunities in the country.
The Insurance Pool, which is represented by Dubai Insurance, is responsible for providing the insurance service.
Who Can Benefit?
Anyone who loses their job in the UAE as a result of termination of services (except for disciplinary reasons or resignation).
Which Sectors Can Apply?
Both government and private sectors.
How Many Months Does It Cover?
Maximum three months.
Where Can I Subscribe?
According to the official Emirates news agency, WAM, residents can visit www.iloe.ae or download the ‘iloe’ smart app. For more information, the Insurance Pool call centre at 600599555.
The Ministry of Human Resources and Emiratisation has also signed nine local insurance companies to set up the programme’s framework. The list includes:
- Dubai Insurance Company
- Abu Dhabi National Insurance Company
- Oman Insurance Company
- Al Ain Ahlia Insurance Company
- Emirates Insurance Company
- Orient Insurance
- Abu Dhabi National Takaful Company
- National General Insurance Company
- Orient UNB Takaful Company
What is the Subscription Fee & Return Payment?
The subscription fees depend on the employee’s basic salary.
First Category: Employees with a basic salary of AED16,000 or less will have to pay a fee of AED 5 per month (AED 60 annually). They are eligible for a monthly cash compensation reaching up to AED 10,000 in case of unemployment.
Second Category: Employees with a basic salary of AED16,000 or more will have to pay a fee of AED 10 per month (AED 120 annually). They are eligible for a monthly cash compensation reaching a maximum of AED 20,000 in case of unemployment.
How is the Subscription Paid for?
The insurance fees can be paid monthly, quarterly, once every six months, or annually. The insurance compensation is calculated at a rate of 60 percent of the employee’s basic salary in the last six months prior to his or her unemployment.
The compensation should be paid within two weeks from the date the claim is submitted. The value of the insurance policy is subject to VAT.
What is the Requirement to Submit an Insurance Claim?
The insured must be subscribed for at least 12 consecutive months to be eligible for a cash compensation. However, they would lose the right to claim the compensation should they leave the country or take up a new job.
Who is Not Eligible?
- Business owners who own and manage their business themselves
- Domestic workers
- Temporary Contract Employees
- Juveniles under the age of 18
- Retirees who receive pension and have joined a new employer