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Failure to register for the Unemployment Insurance Scheme by June 30, 2023 will result in the employee being fined Dh400
Employees in the UAE should enroll in the Unemployment Insurance Scheme as early as possible in order to benefit properly from the scheme and file a claim in a timely manner.
The UAE introduced the Involuntary Unemployment (ILOE) scheme on 1 January 2023 to support employees who are out of work for reasons other than disciplinary action or resignation until they find new employment.
Employees working in the private sector and federal government employees must subscribe to the plan.
Employees in the UAE can subscribe to insurance plans for up to one or two years. Failure to register in the Unemployment Insurance Scheme by June 30, 2023 will result in the employee being fined Dh400.
“People should join as soon as possible, as there is a condition that employees must be subscribed for at least 12 consecutive months to be eligible to file a claim. This means that cash benefits are available for up to three months after the employee has completed the 12 months,” said Dubai Insurance Strategic Partner Manager Dana Kansou said the company spearheaded the campaign on behalf of the country’s ILOE pool.
She gave an example that if an employee loses her job on January 15, 2024 and buys a policy on January 20, 2023, she/he will not be able to file a claim.
“But if they were enrolled in the program for at least 12 consecutive months before losing their job, then they are eligible to claim. So people should subscribe as soon as possible to start the 12-month countdown to eligibility to file a claim,” Kansou said.
Under the ILOE program, eligible employees will receive monthly cash benefits up to 60% of their average base salary for the first six months of unemployment.
As part of this programme, two schemes were introduced. In category A, employees with a basic salary of AED 16,000 or less must pay AED 5 plus VAT per month (or AED 60 plus VAT for a year), up to a maximum of AED 10,000 per month, up to three months. For Category B, workers earning more than Dh16,000 are required to pay Dh10 plus VAT per month (Dh120 plus VAT for one year), up to a maximum of Dh20,000 per month for a maximum of three months.
It is also mandatory that the employee must be a legal resident of the country.
Employees in the UAE are eligible for 12 months of compensation throughout their working life in the UAE.
However, once an employee finds a new job within three months of qualifying compensation, benefits from the program will be withheld.
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