UAE Unemployment Insurance Scheme: As of October 1, 2023, the UAE has introduced a groundbreaking Unemployment Insurance scheme aimed at providing private sector workers with greater job security. This initiative offers peace of mind, reducing job-related anxieties by offering cash compensation to eligible individuals who lose their jobs due to circumstances beyond their control. This article provides a comprehensive overview of the UAE Unemployment Insurance scheme, explaining how it works, who is eligible, and the compensation details.
Understanding the UAE Unemployment Insurance Scheme
The UAE Unemployment Insurance Scheme has been launched by The Ministry of Human Resources and Emiratisation (MoHRE) in collaboration with nine local insurance companies. It is a mandatory program applicable to both private and public sector workers, reinforcing job stability in the nation.
How to Subscribe
To enroll in the UAE Unemployment Insurance scheme, individuals can choose from various convenient channels, including the Involuntary Loss of Employment Scheme website, smart applications, bank ATMs, kiosk machines, business service centers, money exchange companies, and more (additional channels may be announced by MoHRE). Failure to subscribe may result in a fine of Dhs400. Notably, certain groups, such as investors, domestic helpers, pensioners, temporary contract workers, and those under 18, are excluded from the scheme.
Cost and Categories
The insurance scheme is divided into two categories based on the individual’s basic monthly salary:
- Category 1 (Basic Salary up to Dhs16,000): The monthly cost for employees in this category is Dhs5, or Dhs60 annually.
- Category 2 (Basic Salary exceeding Dhs16,000): For those with higher salaries, the insurance cost is Dhs10 per month, or Dhs120 annually. Employees can choose to pay their premiums monthly, quarterly, semi-annually, or annually. It’s important to note that the insurance policy value is subject to value-added tax (VAT), and even commission-based workers can subscribe.
In the unfortunate event of job loss, the UAE Unemployment Insurance scheme offers compensation. The amount varies based on the salary category:
- Category 1: Monthly compensation is capped at Dhs10,000.
- Category 2: Monthly compensation can reach up to Dhs20,000.
Compensation is calculated monthly, amounting to 60 percent of the individual’s basic salary, with a maximum duration of three months per claim from the date of unemployment. Claims must be submitted within 30 days of job loss through approved channels, including the insurance pool’s e-portal, smart application, or call center. Eligible individuals must have worked and subscribed to the insurance scheme for at least 12 months, without having been dismissed for disciplinary reasons or due to resignation. Notably, those who have left the country or secured a new job are not eligible for compensation.
The UAE Unemployment Insurance scheme is a commendable initiative by the government, providing invaluable job security to private sector workers. By enrolling in this program, individuals can mitigate the financial hardships that often accompany unexpected job loss. Eligible workers must subscribe before the October 1 deadline and familiarize themselves with the scheme’s terms and conditions. This step towards a more secure job market is undoubtedly a positive development for the UAE’s workforce.