UAE: Over 7mn Workers Sign up for Unemployment Insurance Scheme
The scheme, which went into effect in January 2023, covers citizens and residents working in the private and federal government sector.
More than 7 million employees across the UAE have signed up for the Involuntary Loss of Employment (ILOE) scheme, the UAE Cabinet revealed.
This was mentioned in an Abu Dhabi UAE Cabinet meeting on Tuesday, where several new policies were approved, including mandatory health insurance for private sector employees, among other key decisions to protect the workforce.
At the meeting, Dubai Ruler and UAE Prime Minister Sheikh Mohammed bin Rashid Al Maktoum noted that over 7 million employees across all sectors in the UAE are benefiting from the ILOE scheme, while 98.8 percent of the workforce in the country are covered by the Workers’ Protection Programme.
UAE unemployment insurance
The scheme, announced in May 2022 and went into effect in January 2023, covers citizens and residents working in the private and federal government sector including:
- Investors (business owners who own and manage their establishments)
- Domestic workers
- Temporary employees
- Minors under the age of 18
- retirees who receive a pension and have joined a new employer
The unemployment insurance scheme is divided into two categories:
- The first covers those with a basic salary of AED16,000 or less, where the insurance premium for the insured employee in this category is set at AED5 per month (AED60 annually), and the maximum monthly compensation is set at AED10,000
- Meanwhile, the second category includes those with a basic salary exceeding AED16,000, where the insurance premium is AED10 per month (AED120 annually). The monthly compensation for this category is capped at AED20,000
By October last year, 6.5 million UAE workers had already registered for the scheme.
How to claim unemployment insurance
The insurance compensation can be claimed as long as the insurer (employee) has been subscribed to the Unemployment Insurance Scheme for at least 12 consecutive months.
The insured’s right to compensation is not eligible if he/she cancels their residency and leaves the country or joins a new job, within the processing period.
The claim will be processed within two weeks of submission.
The compensation is paid for a maximum of three months from the date of unemployment for each claim, provided the employee in question was not terminated for disciplinary reasons, and has not voluntarily resigned.
The amount is calculated at the rate of 60 percent of the average basic salary in the last six months before unemployment in the UAE.
