The Ministry of Human Resources and Emiratisation (MoHRE) has announced that the UAE’s unemployment insurance scheme has exceeded one million subscribers since its launch in January 2023.
The scheme is a form of insurance or social security that provides financial support to employees working in the federal and private sectors if they lose their jobs, as a result of termination by their employers.
All employees have to subscribe mandatorily to the scheme by June 30, 2023. Failure to do so will result in a penalty of Dh400.
The insurance is divided into two categories – the first covering those with a basic salary of AED16,000 and less. The insurance premium for the insured employee in this category is set at AED5 per month (AED60 annually), and monthly compensation is capped at AED10,000 per month. The second category includes those with a basic salary exceeding AED16,000, and the insurance premium is AED10 per month (AED120 annually) with a monthly compensation of up to AED20,000.
The insurance compensation can be claimed as long as the insurer (employee) has been subscribed to the Unemployment Insurance Scheme for at least 12 consecutive months. The claim can be submitted within 30 days of job loss, and will be processed within two weeks of submission. The insured’s right to compensation is forfeited in the event that he/she cancels their residency and leaves the country, or joins a new job, within the processing period.
The compensation is calculated at the rate of 60 percent of the average basic salary in the last six months before unemployment, and paid for a maximum of three months for each claim from the date of unemployment.
Exempted from the scheme are the following: investors, owners of facilities in which they work, domestic helpers, employees with a temporary employment contracts, juveniles under 18 years of age, and retirees who receive a retirement pension and have joined a new job.
Employees may subscribe to the Unemployment Insurance Scheme via the Insurance Pool’s website (www.iloe.ae), smart application (ILOE), bank smart phone applications, kiosk machines, business service centres, money exchanges (such as Al Ansari Exchange), SMS and telecommunication bills.
