UAE Unemployment Insurance Scheme
HLB UAE Payroll Team
The Ministry of Human Resources and Emiratization (MoHRE) announced the launch of the ‘Unemployment Insurance Scheme’ for government and private sector employees, on October 11, 2022.
The Unemployment Insurance Scheme is a type of insurance/social security that offers Emiratis and residents financial help if they lose their jobs as a consequence of being fired by their employers in the public and private sectors. The financial assistance will be provided in exchange for the worker paying a monthly insurance payment while they are employed. It aspires to establish a competitive knowledge economy by recruiting and keeping the greatest worldwide talent while maintaining an acceptable standard of life for the jobless.
It is a mandatory social security support program that will pay all employees excluding investors, domestic helpers, part-time employees, retirees who have a retirement pension and those under the age of 18.
Frequently asked Questions (FAQ’s)
Who is obliged to take out unemployment insurance?
- Both Emirati nationals and expatriates residing in the UAE are subjected to compulsory insurance.
- Employees who work on a commission basis may also subscribe to the scheme.
Employees are not eligible if they are:
- Business owners who own and manage their businesses.
- Household workers.
- Temporary employees.
- Less than 18 years old.
- Retired individuals.
- Employees working in UAE Free Zones.
Is taking out unemployment insurance mandatory?
Yes, taking out unemployment insurance is mandatory starting from January 1, 2023, and employees must subscribe to it before June 30, 2023. Failure to register and pay contributions for more than three months will result in a fine.
How can employees subscribe to the unemployment insurance scheme?
Employees can subscribe to the insurance program through various channels, including the insurance pool’s website, smart application, bank ATMs, kiosk machines, business service centers, money exchange companies, du, and Etisalat. They can also use SMS and visit a website called the insurance pool, which comprises a group of UAE-based insurance companies.
What are the steps to subscribe to the unemployment insurance scheme through the insurance pool website?
To subscribe to the unemployment insurance scheme through the insurance pool website, follow these steps:
- Visit www.iloe.ae.
- Locate and click the “Subscribe Here” red icon.
- You will be directed to the application portal. Under the “individual” category, indicate whether you work for the federal government or the private sector.
- Sign in using your emirates ID or UID number (Unified Identification Number), enter your mobile number, and tap on the “Request OTP” button.
- Enter the OTP you receive, after which you will be redirected to your ILOE Dashboard.
- The dashboard will show you whether you fall under category A or Category B, under the scheme.
- You need to review the summary of your information that is displayed. Then check the box saying “I confirm my entries are correct”.
- Next you can choose your ILOE plan you will have the option to subscribe for one or two years. If you subscribe to the scheme for one year, you will also have the option of paying the premium monthly, quarterly, semiannually, or annually.
- After reviewing, tick the “Terms and conditions” box once you have selected your preferred options. Click on “Pay Now”.
- The insurance certificate will be emailed to you once you enter your email address (Optional).
- Then you will be transferred to the online payment channel, where you will need to enter your card information.
- Following that, an OTP will be delivered to the phone number associated with your card. Enter the OTP for payment processing.
- Finally, you will receive an insurance certificate through email once payment has been processed and receive the confirmation.
Who provides unemployment insurance?
Dubai Insurance Co. (p.s.c.) is the authorized insurer to issue policies for the unemployment insurance scheme on behalf of the Involuntary Loss of Employment (ILOE) Insurance Pool.
Who bears the cost of unemployment insurance?
Employees are responsible for paying the cost of unemployment insurance, which can be paid monthly, quarterly, half-yearly, or annually. However, as per the latest update, employers can choose to buy the policy on behalf of their employees and deduct the premium value from their salary or pay it on their behalf.
What is the cost of unemployment insurance premium in the UAE?
The unemployment insurance program in the UAE has two categories based on the employee’s basic salary. For the first category, which includes employees with a basic salary of AED 16,000 or less, the monthly insurance premium is AED 5. For the second category, which includes employees with a basic salary exceeding AED 16,000, the monthly insurance premium is AED 10.
What are the consequences if an eligible employee does not subscribe to unemployment insurance?
- Never subscribed From July 1st, 2023, employees will pay a fine of AED 400.
- Subscribed but stopped paying for at least 3 consecutive months Employees will be disqualified from receiving unemployment benefits. They will be required to resubscribe by getting a new insurance, pay any overdue sums, and pay a 200 AED penalty.
Who is eligible for a compensation claim?
Compensation is available to employees who paid their insurance premium for a full year and who are physically present in the UAE. Employees will not receive compensation if:
- The employee got fired for disciplinary reasons under the UAE’s Labor Law in the private sector (Federal Decree-Law No. 33 of 2021), the Human Resources Law in the federal government, and any other applicable laws.
- The employee resigns.
- The claim involves fraud or deception.
- The establishment where they work is fictional.
How and in which period must the claim for compensation be made?
Claims must be submitted to the insurance pool within 30 days from the date of unemployment. Claims can be submitted via the e Portal www.dubins-wpp.ae, a smart application and the call centre at 800 382467.
How does the compensation get calculated?
Eligible employees must receive a monthly compensation equal to 60% of their monthly basic salary. However, Maximum compensation amount will be AED 20,000/-.
How long is the compensation paid?
Compensation will be paid from the date he/she loses the job and will be paid for 3 months or until he/she finds a job, whichever is earlier.
- Effective start date of unemployment insurance – January 1st, 2023.
- Last date for registering with unemployment insurance – 30th June 2023, Without any fines.
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