Complete Guide to UAE Unemployment Insurance Scheme

The welfare of both residents and UAE citizens has been the priority in all government schemes. From modernising the framework to regulating labour norms, the eventual purpose of this scheme is to provide for the nation’s individuals and protect the rights of workers. The current endeavour, the UAE unemployment insurance scheme, showcases the extra efforts to save financial stability for employees within the nation. Scroll below to learn important details about the UAE’s social security assistance scheme.

January 2023 news on the UAE’s Unemployment Insurance Scheme

The foremost objective of investing in substructure and articulating labour rules in the UAE is to assist the country’s natives and secure the rights of the working class. Beginning with January 1, 2023, it is important for individuals to buy an insurance scheme to protect against the risk of job loss. The UAE’s unemployment insurance scheme is the newest initiative proposed to foster financial reliability and well-being among employed individuals in the nation, and to date, more than 60,000 individuals have already subscribed to the scheme. Here’s what you must learn about this program.

How Does UAE Unemployment Insurance Work?

Under the latest unemployment insurance programme in the UAE, individuals who encounter job loss can request a fixed amount for a duration of three months, starting from the first day of unemployment. The remuneration amount will be 60% of their basic earnings. All workers, including Emirati and foreign expats, in the private and public sectors are required to register in the unemployment insurance scheme beginning January 1, 2023. The subscription deadline is set for June 30, 2023. Workers who fail to subscribe to the unemployment insurance scheme will be charged AED 400, and an additional AED 200 will be charged to people who fail to make the payment of their insurance within three months of the due date.

Therefore, some groups are excused from the UAE’s unemployment insurance scheme, which includes:

• • Investors who owns the company they work for
  • Domestic helpers
  • Temporary contract workers
  • Juveniles below 18 years of age
  • Retirees receiving pensions who have started a new job
  • Individuals working in Free Zones

Who Qualifies for UAE Unemployment Insurance?

The UAE’s unemployment insurance UAE scheme is accessible to anyone who has lately become jobless, with the exception of investors, individuals below 18 years of age, part-time workers, domestic helpers, retirees receiving pensions who have taken up new employment, and workers terminated for improper behaviour. The insurance scheme provides cash remuneration for about three months per claim to those who have lost their occupation due to “reasons beyond their control.” Moreover, to be eligible for remuneration, the insured person must fit the criteria crafted by the official Involuntary Loss of Employment Scheme. to be qualified for remuneration under the UAE’s unemployment insurance programme, the insured individual must meet the following criteria:

• • Have a minimal subscription time of 12 subsequent months.
  • Have no intervention in subscription for three subsequent months.
  • Be regular with the insurance premium payments.
  • Prove that the reason for joblessness is not because of resignation.
  • Not have been refused for disciplinary grounds under federal labour norms or other applicable measures.
  • Submit the request under 30 days from the date of unemployment or settlement of labour grievances referred to the judiciary.
  • Not have any persisting complaint associated with absenteeism.
  • Not have engaged in crime or deceit in the claim or worked for a fictional establishment.
  • Not have lost their job because of non-peaceful labour stoppages.
  • Be legally present in the UAE.

The scheme also excludes loss of employment due to the following reasons:

• • Riots, war, armed rebellion, revolution, insurrection, military force, foreign enemies, hostilities, invasion, civil war, or civil disorder.
  • Nuclear events, radioactive, pollution, toxic, explosive, or other dangerous effects of explosive nuclear things or part of such equipment
  • Biological or chemical pollution forthcoming from terrorism
  • Direct government acts in the UAE proceeding to expropriation, socialisation of the employer’s facility, or expropriation of funds resulting in insolvency.
  • Force majeure in compliance with UAE’s Civil Transactions Law No. (5) of 1985.

How Do I Apply For Unemployment Insurance?

To benefit from job loss insurance, eligible individuals may approach any of the firms in the UAE to register with the policy and pay the insurance premium. The programme is being given by the Dubai Insurance Company, serving as the representative of an insurance pool including nine companies:

• • Dubai Insurance Company
  • Al Ain Ahlia Insurance Company
  • Abu Dhabi National Insurance Company
  • National General Insurance Company
  • Emirates Insurance Company
  • Orient Insurance
  • Oman Insurance Company
  • Abu Dhabi National Takaful Company
  • Orient UNB Takaful Company

There are multiple ways for employees to register for the insurance plan, including:

• • You can register via the insurance pool’s website (www.iloe.ae) and smart application.
  • Via bank ATMs and kiosk machines
  • Through business service centres
  • Via money exchange firms
  • Through du and Etisalat
  • Via an SMS

• What is the UAE Unemployment Insurance Cost?

The insurance scheme is subcategorized into two based on the employee’s monthly earnings. for individuals making less than AED 16,000 per month, the monthly subscription for insurance coverage is around AED 5 (or AED 60 per year). On the other side, employees making more than AED 16,000 per month have to pay around AED 10 per month (or AED 120 per annum) as the insurance premium. The frequency of payment can be quarterly, monthly, half-yearly, or annually, and the insurance policy’s value comprises VAT (value-added tax). In addition to this, the maximum monthly compensation for the insurance coverage is around AED 10,000 for the first category and around AED 20,000 for the second category. The remuneration is calculated monthly as 60% of the base earning amount.

How Should I File an Insurance Claim?

To be eligible for reimbursement, a terminated worker must have been guaranteed regular employment for a minimum of 12 months, beginning from the day they registered for the plan.

In order to request compensation, the insured person must complete the following criteria:

• • Atleast have a subscription period of 12 consecutive months.
  • Have paid all insurance premiums regularly.
  • Haven’t resigned from the job.
  • Not have been terminated because of disciplinary reasons.
  • Submit the claim under 30 days from the date of unemployment.
  • Not have any persisting complaint associated with absenteeism from work.
  • Not be designated to compensation if there is deception or deceit involved in their claim.
  • Be officially present in the UAE.

You cannot claim the unemployment reimbursement for the following reasons:

• • Completion of the agreement term.
  • Retirement
  • End of a seasonal job
  • End of a project
  • Termination of an internship or training program
  • Death

The insurance coverage isn’t effective under the following circumstances:

• • Armed conflict, comprising riot, war, insurrection, armed rebellion, invasion, revolution, military or usurping force, an act of foreign enemy, hostilities, civil war, or civil disorder.
  • The release of pollutants, radioactive, toxic, nuclear events, explosive, or other dangerous effects of any explosive nuclear equipment or part of such equipment.
  • Pollution produced from terrorism.
  • Direct action by the UAE government leading to the expropriation or nationalisation of the employer’s facility or the confiscation of their money, which results in insolvency.
  • Force majeure, which refers to unforeseeable circumstances in accordance with the Civil Transactions Law.
  • Insured employees will not receive payment if they have left the country or started a new job.

• How is the Claim Amount Determined

The amount of monthly remuneration provided will be equal to 60% of the basic salary received during the 12 months immediately after the job loss. if a claim is requested, the maximum compensation that can be availed of is for a period of three subsequent months. Apart from this, during the insurance period, which covers the whole work life of the insured individual in the UAE, the total amount paid out in claims cannot exceed 12 monthly benefits, irrespective of the number of claims requested.

If I Lose My Job, How Do I Get Unemployment Compensation?

Insured individuals who experience unemployment must request a claim within 30 days of becoming unemployed via one of the three authorised platforms: the smart application, the insurance pool’s e-portal, or the contact centre. Compensation will be given under two weeks of the claimed date and will not surpass three months per claim.

UAE Unemployment Insurance Scheme for Residents and Emiratis

The Minister of Human Resources and Emiratisation (MoHRE), H.E. Dr. Abdulrahman Al Awar, has announced a programme that will offer financial support to people who have lost their jobs. To be eligible for this scheme, all private sector and federal government employees are required to register before June 30, 2023. Failure to do so will result in penalties.

• How Will It Work?

The structure for the programme has been developed in collaboration with nine regional insurance firms by the MoHRE. The companies on the list are:

• • Insurance Company of Dubai
  • National Insurance Company of Abu Dhabi
  • Oman Insurance Organization
  • Emirates Insurance Company Al Ain Ahlia Insurance Company
  • National Takaful Company of Abu Dhabi called Orient Insurance
  • Orient UNB Takaful Company National General Insurance Company 
    • Workers earning up to AED 16,000 in basic salary and those making more than AED 16,000 in basic salary will each fall into one of two groups for the insurance programme.
    • The UAE’s contribution to unemployment benefits for residents and Emiratis has drawn a lot of interest. The monthly insurance fee for the initial group of employees will be AED 5 plus VAT, or AED 60 yearly.
    • The second group of workers must pay AED 10 + VAT every month, or AED 120 annually. Monthly, quarterly, biannually, or yearly payments are all acceptable. The UAE unemployment insurance cost’s coverage is also taxed.
    • The insurance programme’s goal is to offer flexibility and prevent anyone from having an undue burden when it comes to protecting their future.
    • If the required requirements are met, qualified employees will receive a monthly cash payment. For first-category workers, the sum cannot exceed AED 10,000, and for second-category workers, it cannot exceed AED 20,000. The sum will be determined at a rate equal to 60% of their base pay.
    • The employee must submit a file within 30 days of losing their work via one of the claim platforms, such as the smart application, phone centre, or e-portal for the insurance pool. Compensation is limited to three months per claim and will be paid out within 14 days of the claim being filed.

• Eligibility

Any Emirati or UAE citizen employee should have worked and paid into the programme for a minimum of 12 months in order to be eligible for the UAE unemployment insurance claim system.

Employees who leave their jobs or are terminated for disciplinary reasons are ineligible to file claims. Additionally, covered employees are not eligible for a claim if they leave the UAE or work for a different company.

• • Who Are Exempted?

Domestic employees, investors (i.e., business owners), workers in free zones, those on temporary contracts, those under the age of 18, those receiving pensions, and retirees are exempt from the UAE unemployment insurance programme.

• Join the Unemployment Scheme 

  • The MOHRE release states that there are numerous ways to enrol in the UAE unemployment insurance programme. Utilising the free subscription-based Involuntary Loss of Employment (ILOE) website or app is one alternative.
  • The steps are as follows to subscribe:
  • Visit the ‘Subscribe Here’ page on the Involuntary Loss of Employment (ILOE) website.
  • Under the ‘Individual’ category, pick between positions with the government or the commercial sector.
  • Once you log in with your Emirates ID, your phone will receive a one-time password.
  • You’ll see your base wage and the monthly insurance fee. To confirm your details, check the box.
  • Choose the length of the policy’s coverage (one or two years).
  • Choose an annual, semi-annual, quarterly, or monthly premium schedule.
  • Your desired email address to get your insurance certificate should be entered.
  •  Pay with your credit or debit card.
  •  Save a copy of your insurance certificate.

Additionally, you can subscribe through kiosks, bank apps/ATMs, Tawjeeh, Tasheel, Al Ansari Exchange, du, Etisalat, and so on. However, using this method will cost money.

What Paperwork Is Necessary for Subscription?

Applicants must have an active UAE-registered mobile number and a valid Emirates ID in order to apply for the programme.

What Happens if You Don’t Subscribe?

By June 30, 2023, individuals who have not registered for the insurance programme will be subject to an AED 400 fine.

Is it Required for Employers to Register their Employees for the Programme?

Employers are not required to pay for the compulsory plan or to enlist their workers.

What are They Saying?

The new unemployment pay programme for residents and Emiratis will help economic and social development, according to Dr. Abdulrahman Al Awar, Minister of Human Resources and Emiratization. Dr. Al Awar claims that “the new unemployment insurance law is a vital component of the legislative and legal framework that the government is dedicated to developing to meet the needs of the national economy.” he added that this programme is consistent with the UAE’s goals of being a premier hub for talent, companies, and investments, which can be achieved by fostering social and economic advancement and enhancing human capital.

Conclusion

In conclusion, the UAE unemployment insurance programme is an important step towards giving Emiratis and other citizens a social safety net in the event of an unexpected job loss. Employers who qualify may receive financial assistance for up to three months in the event of involuntary unemployment thanks to the required insurance programme. With a variety of premium alternatives and coverage periods available, the scheme also offers employees flexibility and affordability. It is crucial to remember that the programme does not apply to all types of workers, including domestic helpers and those with temporary contracts. The programme is a step in the right direction towards creating a more robust and inclusive economy in the UAE.

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