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Quick Read Section:

• Involuntary loss of employment (ILOE) insurance scheme will be implemented in UAE from Jan 01, 2023.
• Implemented under the Federal Law Decree No.13, the job loss insurance scheme aims at providing financial security to those facing an involuntary loss of employment.
• Eligible individuals will receive a three-month cash compensation of 60 percent of their salary until they find a new job.
• Unemployment insurance benefits will only be enjoyed by those who have paid the premium fees for 12 successive months.
• A subscription fee of 5 AED will be charged for employees with a salary lower than AED 16,000 and 10 AED for employees with a salary greater than 16,000 AED.
• The scheme can be availed by directly applying through the ILOE website or through ATMs, kiosk machines, and exchange centres.

 

You no longer need to worry about the financial setbacks that come along with being unemployed. UAE has your back covered with the new Unemployment Insurance Scheme, introduced in 2023.

Starting this year, every working individual must mandatorily register for the new Unemployment Insurance Scheme in UAE.

The deadline for registering for the Involuntary loss of employment scheme is October 1, 2023.  Individuals who fail to register by this date will face a penalty of AED 400.

Also known as Job Loss Insurance, it is compulsory for Emiratis and expats living and working in the UAE. Individuals will be fined if they fail to subscribe to the Unemployment Insurance scheme.

This new requirement is applicable to people working in both government and private sectors.

 

Types of Unemployment Insurance Scheme

Unemployment insurance is categorized into two schemes in UAE:

• For employees with a monthly income of AED 16,000 and less:

 

Monthly Premium rate: AED 5

Annual Premium rate: AED 60

Compensation: Up to AED 10,000 per month

 

• For employees with a monthly income more than AED 16,000:

 

Monthly Premium rate: AED 10

Annual Premium rate: AED 120

Compensation: Up to AED 20,000 per month

 

Exemptions applicable for the unemployment insurance scheme

The following categories of individuals are exempted from the job loss insurance scheme.

• Children under the age of 18
• Individuals working as domestic help
• Short-term contract workers
• Business owners
• Investors
• Retired senior citizens entitled to pension and employed

 

Benefits of registering for the Unemployment Insurance Scheme

Unemployment insurance benefits will terminate after three months from the last date of work and if you have secured a new job elsewhere.

• Provides financial safety in the case of termination of employment
• You will be entitled to a three-month cash compensation if you lose your job.
• 60 percent of the basic salary you were receiving in the last six months of your employment will be compensated back to you for three months.
• Increases career stability with no monetary involvement at all by the employer
• You can focus on finding your next work without worrying about not getting paid.

 

Scenarios where Involuntary loss of employment insurance claims will not be applicable

The claims for unemployment insurance are not applicable:

• If the employee has voluntarily terminated the contract of employment
• If the contract of employment was terminated due to disciplinary reasons
• If the employee has exited the country
• If the claim has not been made within thirty days of unemployment
• If the subscription fees have not been paid for 12 successive months

 

Ways to apply for the Unemployment Insurance scheme

• Direct apply:

You can register for the unemployment insurance scheme by directly applying on the Involuntary Loss of Employment (ILOE) website or through their mobile app.

Workers may subscribe to the scheme via ILOE Insurance Pool website, its app or any other channel which MoHRE may announce.

• Apply through other channels:

You can also register through Al Ansari Exchange centers, kiosk machines, business service centers, bank ATM’s, and via telecom companies Du or Etisalat.

 

Frequently Asked Questions (FAQs)

 

Am I eligible for getting compensated under the Unemployment Insurance Scheme?

The job loss insurance scheme ensures that eligible individuals are compensated 60 percent of their basic salary on getting unemployed. However, the compensation can only be availed if you have paid the subscription fee for 12 successive months. You lose the right to claim compensation if you find a new job or exit the country.

The term ‘Insured’ mentioned below refers to the individual covered under the Unemployment Insurance policy.

These are the eligibility criteria for compensation under the job loss insurance scheme:

• The insured is presently working within the country.
• The insured has paid the premiums on time without any delay or interruption in subscription for three successive months.
• The insured individual has achieved the minimum subscription period of a year or 12 consecutive months.
• The insured has not had any work-related complaints, especially regarding absence from work.
• The insured’s cause of unemployment is not due to voluntary resignation.
• The insured’s reason of unemployment is not due to disciplinary or legal issues booked under the Labour Relations Law or Human Resources Law.
• The insured’s reason of unemployment is not due to participation in strikes, whether causing harm or not.
• The insured has submitted a claim within thirty days from the date of unemployment or settlement of labour complaint

 

Who is non-eligible to avail compensation under the Unemployment Insurance Scheme?

Individuals whose reason of unemployment is due to resignation and individuals whose employment terminated due to disciplinary issues are non-eligible to avail compensation. If the claim is found to be fraudulent or the company they work for is fictional, they will not be compensated.

Additionally, the scheme also mandates that the loss of employment should not be due to any violent acts, strikes, terrorism, or causing harm to the environment. 

 

How is the compensation sum calculated?

For each claim registered, a cash compensation will be offered after verification. The pay-out sum is calculated at 60 percent of the basic salary per month. The cash compensation will be paid until the individual finds a new job, for a period of three months.

 

When will the compensation get paid?

The compensation sum will be paid two weeks from date of registration of claim. And the amount will only be paid for a period of three months.

 

How can I submit compensation claims for unemployment insurance?

The claims must be registered within thirty days of last date of employment through the ILOE- Involuntary loss of employment e-portal, their mobile application or their call centres.

 

Is there an application fee for subscription to job loss insurance?

There is no application fee if you apply directly through ILOE or Dubai Insurance websites. However, if you apply through exchange centers, banks and other firms, you could be charged an additional service fee.

 

When is the last date to subscribe to the Unemployment Insurance scheme?

Employees have a grace period until October 1, 2023 to register in the unemployment insurance pool. 

 

How much do I have to pay as premium for Unemployment insurance?

Unemployment insurance is available to individuals for rates as low as 5 AED per month. Employees with salaries lower than AED 16,000 should pay AED 5 per month or AED 60 per year as premium. Employees with salaries greater than AED 16,000 should pay AED 10 per month or AED 120 per year as premium. The premium value is subject to five per cent VAT.

 

How much cash compensation am I entitled to on getting unemployed?

If your basic salary is lower than AED 16,000, you can get compensated up to 60 percent of your salary, that is up to 10, 000 AED per month.

If your basic salary is greater than AED 16,000, you can get compensated up to 60 percent of your salary, that is up to 20, 000 AED per month.

 

How much is the penalty for not registering for unemployment insurance?

A fine of AED 400 will be levied on employees who do not register for the Job loss insurance scheme in UAE. An additional AED 200 will be charged on employees who do not pay the subscription fees for more than three months.

 

Will my employer register for unemployment insurance?

Unemployment insurance is an individual requirement for employees, and they have to register on their own. Employers are not obligated to register on behalf of their employees or offer to pay their premium fees. 

 

When do I pay the Job loss insurance premium fees?

The premium fees can be paid monthly, on a quarterly basis, every six months or at the end of each year.

 

Loss of employment can be a very stressful time and causes a lot of anxiety about the future. The Unemployment Insurance initiative by UAE comes as a relief during such a time. It ensures that the unemployed can continue living on adequate resources until they find another place of employment.

Subscribe now to the Unemployment insurance scheme to enjoy unemployment benefits in your time of need.

Contact us today for all your insurance needs.

Disclaimer: This article was written as per news updates published till July 09, 2023 and is subject to new revisions made by the government.