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The UAE Unemployment Insurance Programme Explained For Expats

The new Unemployment Insurance Scheme behaves as a 'safety net', which will pay UAE residents a cash sum if they lose their jobs

Posted on

3 November 2022

Last updated on 12 January 2023
The UAE unemployment scheme explained for expats

The insurance programme can pay a cash sum to unemployed UAE residents for a maximum of three months.

Government workers and private sector employees must apply for the UAE's new social security support programme from January 1, 2023. The UAE Ministry of Human Resources and Emiratisation announced the insurance programme on Wednesday, after signing an agreement with nine local insurance companies.

The new mandatory programme is under the Federal Decree-Law No. (13) Of 2022, the Involuntary Loss of Employment (ILOE) insurance scheme.

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We've compiled everything you need to know about the the new mandatory Unemployment Insurance Scheme for Emiratis and expats, including how much it costs, who are eligible to claim benefits, what are the limitations, etc.

What is the UAE Unemployment Insurance Scheme?

The UAE Unemployment Insurance Scheme is part of the nation's social security support programme. It is a mandatory insurance subscription that will pay both Emiratis and expat employees working in the government or private sector a cash sum for a maximum of three months if they lose their jobs.

The new insurance scheme was introduced to help ensure a sustainable and decent life for working UAE citizens and foreign residents during a period of unemployment.

"It also creates a safety net that supports employees in their career path and ensures their livelihood by relying on mechanisms that do not incur additional costs for employers and is paid by the employee," added state news agency Wam.

What are the insurance programme categories?

The Unemployment Insurance Scheme is divided into two categories.

The first covers employees in the UAE who earn a basic salary of AED 16,000 or less per month. The second category is for workers earning a monthly basic salary of AED 16,000 or more, according to state news agency Wam.

What is the UAE Unemployment Insurance Scheme?

How much does the Unemployment Insurance Scheme cost?

The insurance cost for employees in the first category is set at AED 5 per month or AED 60 a year, while workers in the second category who earn a higher basic salary will pay AED 10 per month or AED 120 annually.

The unemployment insurance payments must be made by employees either on a monthly, quarterly, half-yearly, or annual basis.

The value of the insurance policy is subject to VAT, said Wam.

How much can unemployed UAE residents receive under this programme?

For employees under the first category, the value of the monthly cash sum will not exceed AED 10,000. A maximum of AED 20,000 can be given for workers under the second category.

The cash sum for both categories will be calculated at a rate of 60% of their basic salary, said the UAE Ministry of Human Resources and Emiratisation (MoHRE).

UAE Unemployment insurance programme guide

How to apply for the UAE Unemployment Insurance scheme?

Workers may subscribe to the scheme via the Insurance Pool website and its app (Dubai Insurance Company) and any other channel which MoHRE may announce.

Private and public sector employees can apply for the UAE Unemployment Insurance scheme through the Insurance Pool website and its app (Dubai Insurance Company) and any other channel which the MoHRE may announce.

How to apply for the UAE Unemployment Insurance scheme?

Image source: u.ae

How to claim unemployment insurance benefits?

Within 30 days from the date of unemployment, insured workers who lose their jobs must submit their claim through three approved claim channels:

  1. The insurance pool's e-portal
  2. Smart application
  3. Call centre.

Within two weeks from the date of the claim, you will receive a cash sum each month based on your insurance category and basic salary. Three months of unemployment payments is the maximum per claim.

Who's eligible to claim unemployment insurance?

To be eligible for the insurance payment, the employee must have been in employment and subscribed to the insurance programme for at least 12 months.

Who's not eligible for the unemployment payment?

Those who are not eligible to claim are:

  • Employees who willingly resigned from their job
  • Employees who have been dismissed for disciplinary reasons
  • Workers who left the country
  • Workers who started a new job
  • Part-time employees
  • Freezone employees
  • Investors
  • Owners of the businesses in which they work
  • Workers below the age of 18
  • Domestic helpers
  • Retirees who receive a pension

"The new unemployment insurance law is an essential part of the legislative and legal structure that the government is keen to develop to meet the requirements of the national economy," said Dr Abdulrahman Al Awar, Minister of Human Resources and Emiratisation.

He added: "This supports the UAE’s endeavours to be the next capital of the future, and a global incubator for talent and companies and investments, which can be achieved through economic and social development and the empowerment of human capital."

For more information about the UAE Unemployment Insurance scheme, please visit the official portal of the UAE Government.

 
 

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