Unemployment insurance is a crucial safety net for employees facing unexpected job loss, providing financial support during the transition period. In the UAE, significant developments have taken place in the unemployment insurance scheme, expanding its coverage and offering enhanced benefits. This article explores the latest updates on unemployment insurance in the UAE, outlining eligibility criteria, application procedures, and the calculation of compensation.
Expanding Coverage: Unemployment Insurance for All
The UAE has taken a commendable step by broadening the scope of its mandatory unemployment insurance scheme. Previously, the scheme applied to all employees in the country, excluding those in semi-government entities and Freezone companies. However, in line with efforts to ensure comprehensive protection, the mandatory unemployment insurance scheme now covers employees in these previously exempted categories as well.
Introducing Fixed Cash Compensation
Under the new unemployment insurance plan, eligible individuals receive fixed cash compensation for a period of up to three months, starting from day one of unemployment. The scheme provides 60% of the employee’s basic income, with a maximum monthly payment of AED 20,000 (USD 5,445). This financial support aims to ease the financial burden faced by individuals during the job loss transition.
Unemployment Scheme Deadline: June 30, 2023
To benefit from the unemployment insurance program, all Emirati and foreign workers in the public and private sectors must subscribe to the new scheme by June 30, 2023. Failure to subscribe within the designated timeframe will result in a penalty of AED 400, with an additional AED 200 charge for those who fail to pay within three months of the due date. It is essential to adhere to this deadline to avoid unnecessary penalties and ensure access to crucial financial assistance during unemployment.
Exemptions from the Unemployment Insurance Scheme
While the unemployment insurance scheme aims to provide comprehensive coverage, certain categories are exempted from the program. The following individuals are not eligible for unemployment insurance in the UAE:
- Investors: Owners of companies they invest in.
- Domestic Helpers: Individuals employed as domestic helpers.
- Temporary Contract Workers: Workers on temporary contracts.
- Juveniles Under 18: Individuals below the age of 18.
- Retirees Entitled to Pension: Retirees who receive a pension and have commenced new employment.
Eligibility Criteria for Unemployment Insurance
To qualify for unemployment insurance in the UAE, individuals must meet specific eligibility criteria. The following conditions must be fulfilled:
- Minimum Subscription Period: The insured individual must have a minimum subscription period of 12 consecutive months.
- No Interruption in Subscription: There should be no interruption in the subscription for three consecutive months.
- Timely Payment of Premiums: All insurance premiums must be paid promptly.
- Proof of Unemployment: The claimant must provide evidence that unemployment was not due to voluntary resignation.
- No Dismissal for Disciplinary Reasons: The individual should not have been dismissed for disciplinary reasons under applicable labor laws.
- Timely Claim Submission: The claim must be submitted within 30 days of the loss of the work relationship or settlement of a labor complaint.
- No Existing Complaints Related to Absence from Work: There should be no existing complaints related to the absence from work.
- No Fraudulent Activity: The claim should not involve any fraudulent or deceitful activities.
- Non-Association with Non-Peaceful Labor Strikes or Stoppages: The loss of employment should not be a result of non-peaceful labor strikes or stoppages.
- Legal Presence in the UAE: The claimant must have a legal presence in the UAE.
Meeting these criteria ensures that individuals can access the benefits of this scheme.
Follow These Easy Steps to Subscribe to UAE’s Unemployment Insurance Scheme
The Ministry of Human Resources and Emiratisation (MoHRE) in the UAE has made it mandatory for eligible employees to subscribe to the unemployment insurance scheme. If you are eligible, follow these simple steps to ensure you have access to this low-cost security net:
Step 1: Visit the website
Go to www.iloe.ae and click on the “subscribe here” button to access the registration page.
Step 2: Select your sector
Choose the relevant sector in which you are employed.
Step 3: Provide personal information
Enter your personal identification details, phone number, and the verification code you receive via SMS. Additionally, select your preferred payment interval, whether it’s monthly, quarterly, semi-annual, or annual. Don’t forget to provide your email address as well.
Step 4: Complete registration
Proceed to the payment gateway to successfully complete your registration.
It’s important to note that the deadline to subscribe to the scheme is June 30 to avoid any penalties. The majority of subscribers have found the insurance pool’s website (www.iloe.ae) to be the preferred channel. However, you can also subscribe through the pool’s app (IOLE), kiosks, business service centers, money exchange offices like Al Ansari, and various bank apps.
The scheme covers employees in the federal government and private sectors, divided into two categories based on basic salary. For those earning Dh16,000 or below, the insurance premium is Dh5 per month (Dh60 annually), with a maximum monthly compensation of Dh10,000. On the other hand, the second category includes those with a basic salary exceeding Dh16,000, with an insurance premium of Dh10 per month (Dh120 annually) and a monthly compensation of up to Dh20,000.
To be eligible for insurance compensation, you must have subscribed to the scheme for at least 12 consecutive months. If you experience job loss, submit your claim within 30 days, and it will be processed within two weeks. However, please note that if you cancel your residency, leave the country, or join a new job during the processing period, your right to compensation will be forfeited.
The compensation amount is calculated at 60% of the average basic salary for the six months preceding unemployment. It can be claimed for a maximum of three months from the date of unemployment.
By following these easy steps, you can ensure that you have the necessary coverage and financial support in case of unexpected job loss.
