The UAE Unemployment Insurance Scheme is a mandatory program that all Emirati and foreign workers in the public and private sectors must subscribe to from January 1, 2023, the Ministry of Human Resources and Emiratization said.
Fortunately, employees in free zones can now also voluntarily register for unemployment insurance.
The social security support program, announced last May, is a welcome financial safety net that pays Emiratis and residents a cash payment for three months if their job is terminated by their employer.
To receive unemployment benefits, workers must be registered with the scheme and pay an insurance premium based on their monthly salary.
The application deadline for the unemployment insurance program is June 30, the ministry said.
The system will ensure the sustainability of a decent life for Emiratis and residents during their unemployment and reduce business risks, the ministry said at the time.
The ministry signed an agreement with nine insurance companies that sets the framework for the unemployment insurance scheme and released more details about the scheme, including how much it will cost and that workers will have to pay for it themselves.
“The new Unemployment Insurance Act is an integral part of the legislative and legal structure that the government intends to evolve to meet the needs of the national economy,” said Dr. Abdulrahman Al Awar, Minister of Human Resources and Emirateization.
“This supports the UAE’s efforts to be the next capital of the future and a global incubator for talent, business and investment, which can be achieved through economic and social development and the strengthening of human capital.”
Here’s everything you need to know about the new initiative.
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What is unemployment insurance?
Last May, the Ministry of Human Resources and Emiratization announced a new federal law covering the program.
It is a mandatory social security program that pays Emiratis and foreign workers in the private and public sectors a cash payment for a maximum of three months if they lose their job.
How does it work?
Compensation will be paid for a maximum of three months from the date an employee loses his job and will be calculated at 60 percent of his base salary for a maximum payment of Dh20,000 (US$5,445) a month, the ministry said.
How much does the insurance cover cost?
The cost of the insurance program is divided into two categories.
The first category includes workers earning a basic salary of Dh16,000 or less per month. The second category is for workers earning a monthly base salary of Dh16,000 or more.
Insurance costs for employees with a basic salary of Dh16,000 or less were fixed at Dh5 per month or Dh60 per year.
Workers earning a monthly base salary of Dh16,000 or more pay Dh10 per month or Dh120 per year.
Who pays for the insurance cover?
Unemployment insurance is paid by the worker himself. This can be paid either monthly, quarterly, semi-annually or annually, the ministry said. The value of the insurance policy is also subject to VAT.
UAE Unemployment Benefits – in pictures
If I lose my job, how much will I get from unemployment insurance?
Unemployment benefits are based on your monthly base salary.
However, the value of the monthly cash sum will not exceed Dh10,000 for the first category of employees and Dh20,000 for the second category.
The ministry said it was calculated at 60 percent of base salary.
For example, if you were earning a base salary of Dh10,000 a month and you lost your job, you would receive 60 percent of that for three months, or Dh6,000.
How do I get unemployment benefits if I lose my job?
Insured workers who lose their job must submit their claim within 30 days from the date of their unemployment through three approved claim channels: the Insurance Pool e-portal, the Smart Application and the Call Center.
Compensation will be paid within two weeks from the date of the claim and is limited to a maximum of three months per claim.
Insured workers who lose their job must submit their claim within 30 days from the date of unemployment through three approved claim channels: the Insurance Pool e-portal, the intelligent application, and the call center.
Ministry of Human Resources and Emirateization
Who is entitled to unemployment insurance?
Employees are eligible for unemployment benefits if they have worked for at least 12 months and subscribed to the insurance program, unless they have been dismissed for disciplinary reasons or dismissal.
Employees who work on a commission basis can also join the program.
However, insured workers are not entitled to the payment if they have left the country or started a new job.
Is it mandatory for everyone working in UAE?
No it is not. The insurance program does not apply to investors such as B. Owners of the businesses in which they work, domestic help, part-time workers, employees under the age of 18 and pensioners who are on a pension and have started a new job.
Can free zone employees register for the program?
Yes, you can. A recent update to the Involuntary Loss of Employment (ILOE) website confirms that workers in free zones can now voluntarily register for unemployment insurance.
“Do you work in the private sector for an organization that is not registered with MOHRE like the companies in the free zone area? You can now subscribe by clicking ‘Subscribe’ here and going to ‘Not registered with MOHRE’ on the ILOE portal. ” it said.
How do I subscribe to the program?
All federal and private sector employees have until June 30 to enroll in the new Social Security assistance program.
The insurance pool represented by Dubai Insurance is responsible for the provision of services.
Employees can subscribe to the insurance program in a variety of ways, including through the Insurance Pool website and its smart application, as well as through ATMs, kiosk machines, business service centers, money exchange companies, du and Etisalat, or by SMS, called the Ministry.
The ministry may also announce other channels at a later date that will allow workers to register for the unemployment insurance scheme, it said.
Updated May 09, 2023 10:15 am