UAE employment insurance scheme to launch on January 1

The UAE Ministry of Human Resources and Emiratisation (MoHRE) has announced that subscriptions to the Unemployment Insurance Scheme will start on January 1, calling on UAE nationals and residents working in the federal government and private sector to subscribe.

Insurance Pool, represented by Dubai Insurance Company, is responsible for providing insurance services. According to the Wam news agency, the pool offers seven subscription channels: website www.iloe.ae, smart app “iloe”, kiosk machines, merchant service centers, Al Ansari Exchange, bank ATMs and apps, and telecom bills.

The Unemployment Insurance Scheme, derived from Federal Act 13 of 2022, aims to create a low-cost job safety net that supports employees in their careers and provides them with job stability at no cost to employers.

Anyone who loses their job due to termination of service (except for disciplinary reasons or resignation) is entitled to up to three months of cash compensation.

Subscription fees depend on the employee’s base salary. The first category is for those with a basic salary of AED 16,000 or less, with a subscription fee of AED 5 per month (AED 60 per year), and the second category for those with a basic salary of more than AED 16,000, with a subscription fee of AED 10 per month (AED 120 per year).

The first category is eligible for a maximum monthly cash compensation of AED10,000, while the second category has a maximum monthly cash compensation of AED20,000.

Premiums can be paid monthly, quarterly, every six months or annually. The insurance premium is calculated according to 60% of the basic salary of the employee in the last six months before unemployment.

Compensation should be paid within two weeks from the date of filing the claim. The insured can file a claim through a variety of claim channels.

Insureds must have subscribed for at least 12 consecutive months to be eligible for cash compensation. However, they lose their right to claim compensation if they leave the country or take up a new job, the report said.

It added that investors – owners of the establishments they work in, domestic workers, casual contractors, youths under 18 and retirees who receive a pension and join a new job – are not eligible for the insurance scheme.