unemployment insurance UAE
Insights, News, United Arab Emirates

UAE Introduces Unemployment Insurance Scheme How to Apply

People who have lost their jobs can opt for the unemployment insurance UAE established by the authorities. Besides, all workers must register in this scheme that began to apply this year. This is one of the programs of the national government to support workers who lose their jobs under certain circumstances.

In this article, we will show you what this scheme consists of and who is eligible for it. In the same way, you will know what the conditions are for you to receive unemployment compensation. Let us see:

  1. This is the new UAE unemployment insurance scheme
  2. Eligibility for unemployment insurance UAE
  3. What is the cost of signing up for unemployment insurance?
  4. Means of applying for unemployment insurance UAE
  5. Do you know to claim this insurance?
  6. Learn more about this insurance

1. This is the new UAE unemployment insurance scheme

unemployment insurance UAE The unemployment insurance scheme implemented in the UAE allows participants to receive a payment for a limited time. This scheme, for those who lose their job, consists of a fixed sum that the person will receive for 3 months. In this way, from the beginning of unemployment, the beneficiary will receive an amount equivalent to 60% of his/her basic salary.

However, the total amount may not exceed a monthly payment of AED 20,000 during the established time. Also, Emirati and foreign workers (from the public and private sectors) must enroll in this unemployment insurance scheme UAE. This mandatory registration began on January 1, 2023, and the authorities expect it to end in the first half of the year.

In the same way, workers who do not register in the system will face a fine of AED 400. Likewise, those who do not pay the insurance within three months after the due date will have to pay a fine of AED 200. However, the next categories of workers do not apply to this scheme:

  • Investors or owners of companies.
  • Domestic workers.
  • Workers with temporary contracts.
  • Those under 18 years of age.
  • Retirees receiving a pension and got a new job.
  • Employees in free zones like IFZA.

1.1 What are the objectives of unemployment insurance UAE?

The UAE authorities have made it clear that it has clear goals in instituting unemployment insurance. The established goals are the following:

  • Provide scheme participants with a fixed income for 3 months while they remain unemployed
  • Emirati employees in the national labor system
  • Enabling citizens to have a dignified life through social protection
  • Achieve a competitive knowledge economy, to attract and retain the best international talent

2. Eligibility for unemployment insurance UAE

All people who have recently become unemployed are entitled to receive this benefit. However, people who belong to any of the categories detailed above cannot receive it. Similarly, employees fired for misconduct cannot benefit from the unemployment insurance law.

In addition, a worker fired for reasons beyond their control, will receive compensation for three months for each claim. However, an employee must meet certain criteria to be able to obtain this compensation, which is the following:

  • The employee must have at least 12 months of subscription to the scheme
  • Subscription must not be interrupted for 3 continuous months
  • Subscribers must pay premiums due up to the time of application
  • Prove that the reason for unemployment was not due to resignation
  • In addition, the employer cannot dismiss the worker for disciplinary reasons according to the UAE Labour Law. Likewise, this case of dismissal is governed by the Human Resources Law of the federal government, in addition to the applicable legislation.
  • The unemployment insurance UAE beneficiary must submit the claim within 30 days of unemployment. You can also do so after the resolution of the labor complaint in the judiciary.
  • The insured cannot have a claim against him for absence from work.
  • You cannot receive compensation if there is fraud or intent in your claim, or if the establishment to which you claim to belong is fictitious.
  • The cause of job loss cannot be a strike, non-peaceful work stoppage, whether or not it causes damage
  • The person who will receive the benefit must be present in the UAE

2.1 Other causes that prevent receiving the insurance

Apart from the particularities for which an unemployed person cannot receive the benefit, there are also other more serious ones. You can see these reasons below:

  • By war, riot, insurrection, armed rebellion, revolution, military or usurping force, invasion, the act of a foreign enemy, hostilities, war, or civil disorder.
  • Discharges of contaminants, nuclear events, radioactive, toxic, or explosive effects, as well as dangerous effects of nuclear equipment or parts of equipment.
  • In case of biological or chemical contamination due to the effects of terrorism or that contributes to it.
  • Due to expropriation or nationalization of the facilities of the company for which the employee works or the confiscation of money, which produced insolvency.
  • Due to cases of force under the United Arab Emirates Civil Transactions Law No. (5) of 1985.

3. What is the cost of signing up for unemployment insurance?

unemployment insurance UAEThe authorities have established 2 categories for the payment of unemployment insurance UAE premiums as follows:

  • For workers with a base salary of AED 16,000 or less, the monthly premium is AED 5 (AED 60 per year). In addition, compensation for workers in this category must not exceed AED 10,000 per month.
  • For workers with a base salary above AED 16,000, the monthly premium is AED 10 (AED 120 per year). In addition, the compensation for workers in this category must not exceed AED 20,000 per month.

Also, workers in any of the groups can choose a monthly, quarterly, semi-annual, or annual premium payment. Besides, a worker can agree with the insurance company to subscribe to other benefit packages. Likewise, the value of the unemployment insurance Dubai policy or the other emirates is subject to VAT.

4. Means of applying for unemployment insurance UAE

To join the UAE unemployment insurance scheme, you need to contact one of the companies that offer this policy. In addition, in these companies, you can also pay the insurance premiums as showed above. In this case, the company in charge of this scheme is Dubai Insurance Company, which owns the following 9 companies:

  • Emirates Insurance Company.
  • Abu Dhabi National Insurance Company.
  • Dubai Insurance Company.
  • Al Ain Ahlia Insurance Company.
  • National General Insurance Company.
  • Orient Insurance.
  • Abu Dhabi National Takaful Company.
  • Oman Insurance Company.
  • Orient UNB Takaful Company.

Similarly, workers can enter the unemployment insurance scheme in a variety of ways, including the following:

  • The website of the ILOE Insurance Pool or its smart application.
  • At kiosk machines.
  • At Bank ATMs.
  • Business service centers.
  • At Money exchange companies.
  • Etisalat and du.
  • By SMS.
  • Other channels offered by MOHRE with the service providers.

5. Do you know to claim this insurance?

To begin, the employee must file the claim for the benefit within 30 days of the start date of unemployment. You can do this through the electronic portal of the insurance group, the smart application, or the contact center. From that moment, the insurer has 2 weeks from the claim to transfer the compensation to the insured.

In addition, insurers must abide by the terms and conditions of the policy and the laws of the Central Bank of the UAE. In this way, the beneficiary will receive compensation from the date on which he loses his job. Plus, you will get paid for 3 months or until you find a new job, whichever comes first.

MOHRE is the entity in charge of reporting non-compliance with the terms and conditions of the policy by supplier companies. On the other hand, the corresponding authorities will establish the insurance conditions for federal government employees. In this case, it is done by the Federal Government Human Resources Authority in coordination with the Ministry of Finance.

5.1 Calculation of the claim

The unemployment insurance law determines that the compensation consists of 60% of the average salary for the last 12 months. In addition, the maximum compensation per claim is given to the insured only for 3 months. Likewise, during the entire working life of the insured, the payment may not exceed 12 monthly benefits regardless of the number of claims.

6. Learn more about this insurance

The UAE Unemployment Insurance Scheme is a government scheme whose main focus is to provide compensation for the unemployed. However, it has a 3-month limit, which is used by the insured to maintain their standard of living while they find a new job. In addition, the payment consists of 60% of the average salary and must meet the strict conditions established by the authorities.

Apart from providing you with more information about this government plan, we offer you the following services: Employer of recordhire contractorhire remote worker, payroll outsourcing, and more.

Our knowledge of the UAE work environment enables us to provide you with the best advice on this and other matters. To contact us you only have to call us at the telephone number +971 43 316 688, you can also send us an email at [email protected]. We are at your disposal for your inquiries and contracting our multiple services.

On the other hand, if you are unemployed and looking for a job opportunity, go to thetalentpoint.com and register. In this way, you can aspire to join one of the best companies by sending your CV to [email protected].

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