Contents
- 1 Understanding the Unemployment Insurance Scheme
- 2 What is the Unemployment Insurance Scheme?
- 3 Insurance Providers
- 4 FAQs for the Comprehensive Guide to the Unemployment Insurance Scheme in the UAE
- 4.1 What is the purpose of the Unemployment Insurance Scheme (UIS)?
- 4.2 Who is covered under Federal Decree-Law No. 13 of 2022 regarding the Unemployment Insurance Scheme?
- 4.3 What are the requirements to qualify for compensation under the Unemployment Insurance Scheme?
- 4.4 How is the compensation amount determined in the Unemployment Insurance Scheme?
- 4.5 Can insured workers negotiate additional benefits with their insurance provider under the Unemployment Insurance Scheme?
Understanding the Unemployment Insurance Scheme
The Unemployment Insurance scheme in the UAE is a crucial form of social security designed to provide financial support to Emiratis and residents working in the federal and private sectors who face job loss due to employer termination. This initiative aims to ensure a decent standard of living for the unemployed while fostering a competitive knowledge economy by attracting and retaining top international talent.
What is the Unemployment Insurance Scheme?
The Unemployment Insurance scheme offers financial assistance to workers who lose their jobs due to employer termination. This support is provided in exchange for a monthly insurance premium paid by the worker during their employment period.
“Ultimate Handbook on Navigating the Unemployment Insurance Scheme in the UAE”
Scope of the Scheme
The scheme encompasses all workers in the private and federal sectors, with exceptions for:
- Investors and business owners managing their businesses
- Domestic workers
- Temporary employees
- Juveniles under 18 years old
- Retirees receiving pensions and rejoining the workforce
Cost of Subscription
The subscription cost varies based on the worker’s basic salary:
- Workers earning AED 16,000 or less pay AED 5 monthly (AED 60 annually), with compensation capped at AED 10,000 per month.
- Workers earning more than AED 16,000 pay AED 10 monthly (AED 120 annually), with compensation capped at AED 20,000 per month.
Premiums can be paid monthly, quarterly, half-yearly, or annually, and the insurance policy value is subject to VAT. Workers may also subscribe to additional benefits in coordination with the insurance company.
Subscription Channels
Workers can subscribe to the scheme through the ILOE Insurance Pool website, its app, and other channels announced by MoHRE. Subscription is mandatory for federal government and private sector employees starting January 1, 2023.
Insurance Providers
The insurance pool is represented by Dubai Insurance Company and includes:
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Abu Dhabi National Insurance Company
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Al Ain Ahlia Insurance Company
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Emirates Insurance Company
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National General Insurance Company
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Orient Insurance
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Oman Insurance Company
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Orient UNB Takaful Company
Filing a Compensation Claim
Workers must submit their claims within 30 days of unemployment insurance. The provider has two weeks to review the claim and deposit the money into the policyholder’s account.
. Compensation begins from the job loss date and is provided for up to three months or until the worker finds a new job, whichever comes first. Claims are processed following the insurance policy terms and UAE Central Bank regulations.
Eligibility for Compensation
To qualify for compensation, workers must have paid the monthly premium for at least 12 consecutive months.
Suspension of Compensation
Compensation eligibility is suspended if:
- The worker is dismissed for disciplinary reasons under UAE’s Labour Law (Federal Decree Law No. 33 of 2021) and related legislation.
- • The claim involves fraud or dishonesty.
- .
- The worker’s establishment is found to be fictitious.
Failure to Subscribe and Pay
From October 1, 2023, the UAE Government enforces fines for non-compliance with the Unemployment Insurance scheme:
- AED 400 fine for failing to subscribe.
- AED 200 fine and cancellation of the insurance certificate for failing to pay premiums for over three months.
- Unsettled fines will be deducted from wages through the Wages Protection System (WPS) or end-of-service benefits.for picture more
Objectives of the Scheme
The scheme aims to:
- Provide income during unemployment periods.
- Enhance Emiratis’ competitiveness in the labor market.
- Ensure social protection and decent living standards.
- Foster a competitive knowledge economy by attracting and retaining top talent.
Regulations Governing the Scheme
The scheme is regulated by:
- Federal Decree Law No. 13 of 2022 Concerning Unemployment Insurance Scheme.
- Cabinet Resolution No. 97 of 2022 Regarding The Unemployment Insurance Scheme’s Implementation Procedures and Controls.
For detailed information, refer to the relevant PDF documents and links provided by MoHRE.
FAQs for the Comprehensive Guide to the Unemployment Insurance Scheme in the UAE
What is the purpose of the Unemployment Insurance Scheme (UIS)?
The purpose of the Unemployment Insurance Scheme (UIS) is to provide a social safety net that ensures a decent standard of living for insured employees and their families during periods of unemployment. The scheme offers financial compensation for a limited period until the insured finds a new job, as outlined in Decree-Law No. 13 of 2022.
Who is covered under Federal Decree-Law No. 13 of 2022 regarding the Unemployment Insurance Scheme?
Federal Decree-Law No. 13 of 2022 applies to all workers in the private and federal sectors, with certain exceptions. These exceptions include investors and business owners managing their businesses, domestic workers, temporary employees, juveniles under 18 years old, and retirees who have rejoined the workforce.
What are the requirements to qualify for compensation under the Unemployment Insurance Scheme?
To qualify for compensation under the Unemployment Insurance Scheme, workers must have consistently paid their monthly premiums for at least 12 months. Compensation eligibility is suspended if the worker is dismissed for disciplinary reasons, if the claim is fraudulent or dishonest, or if the worker’s establishment is deemed fictitious.
How is the compensation amount determined in the Unemployment Insurance Scheme?
The compensation amount under the Unemployment Insurance Scheme is based on the worker's basic salary. Workers earning AED 16,000 or less receive compensation capped at AED 10,000 per month, while those earning more than AED 16,000 receive compensation capped at AED 20,000 per month. Compensation is provided for a maximum of three months or until the worker secures new employment, whichever comes first.
Can insured workers negotiate additional benefits with their insurance provider under the Unemployment Insurance Scheme?
Yes, insured workers can negotiate additional benefits with their insurance provider in coordination with the insurance company. The value of the insurance policy is subject to VAT, and workers can subscribe to additional benefits according to the arrangements made with the insurance provider.
