UAE Unemployment Insurance Scheme – A Comprehensive Guide

UncategorizedUAE Unemployment Insurance Scheme - A Comprehensive Guide

UAE Unemployment Insurance Scheme

Losing a job is a challenging and stressful event for anyone, anywhere. Fortunately, in the UAE, the government has instituted the Unemployment Insurance Scheme to offer financial support to Emiratis and residents working in the federal and private sectors who may lose their jobs due to termination by their employers. This article aims to guide you through the application process of this scheme.

   

Highlights

  • Introduction
  • Understanding the ‘Unemployment Insurance Scheme’
  • Scope of the Scheme
  • Cost of Subscription
  • Channels for Subscribing
  • Filing for a Compensation Claim
  • Eligibility for the Scheme
  • Suspension of the Compensation
  • Objectives of the Scheme
  • Regulations Governing the ‘Unemployment Insurance Scheme’
  • Frequently Asked Questions (FAQs)
  • Conclusion

Understanding the ‘Unemployment Insurance Scheme’

The Unemployment Insurance Scheme is a form of insurance/social security initiative designed to provide financial support to unemployed individuals in the UAE. The compensation is given in exchange for a monthly insurance premium paid by the worker during his or her employment. The overarching goal of this scheme is to ensure a continued decent standard of living for the unemployed and cultivate a competitive knowledge economy by attracting and retaining top-tier international talent.

Scope of the Scheme

UAE Unemployment Insurance Scheme

The scheme encompasses all workers in the private and federal sectors with a few exceptions, namely investors, business owners who manage their own businesses, domestic workers, temporary employees, juveniles under the age of 18, and retirees who receive a pension and have joined a new employer.

Cost of Subscription

The cost of the scheme depends on the worker’s basic salary. Workers with a basic salary of AED 16,000 or less will need to pay a monthly insurance premium of AED 5, translating to AED 60 annually. In contrast, those with a basic salary exceeding AED 16,000 will need to pay AED 10 per month, totaling to AED 120 annually. The insured worker can choose to pay the premium on a monthly, quarterly, half-yearly, or annual basis.

Channels for Subscribing

Subscription to the scheme can be completed via the ILOE Insurance Pool website and its app. Federal government and private sector employees must subscribe to the scheme from 1 January 2023.

Filing for a Compensation Claim

Upon becoming unemployed, the worker has 30 days from the date of unemployment to submit the claim. The insurance company then has two weeks from receiving the claim to transfer the compensation to the insured’s account. Compensation is paid from the date the insured loses the job and continues for 3 months or until he/she finds another job, whichever comes first.

Eligibility for the Scheme

UAE Unemployment Insurance Scheme

To qualify for compensation, the worker must have been paying the monthly premium for at least 12 consecutive months. This ensures that only those who have sufficiently contributed to the scheme can benefit from it during unemployment.

Suspension of the Compensation

A worker can lose his/her eligibility for compensation under certain circumstances. These include being dismissed from work for disciplinary reasons, involvement of fraud or deceit in their claim, or employment in a fictitious establishment.

Objectives of the Scheme

The Unemployment Insurance Scheme aims to provide income for a limited period during unemployment, enhance the competitiveness of Emiratis in the labour market, offer social protection to ensure continued decent living for the unemployed, and contribute to a competitive knowledge economy by attracting and retaining the best international talent.

Regulations Governing the ‘Unemployment Insurance Scheme’

The scheme is governed by Federal Decree Law No. 13 of 2022 Concerning Unemployment Insurance Scheme and Cabinet Resolution No. 97 of 2022 Concerning the Procedures and Controls for Implementing Unemployment Insurance Scheme.

Frequently Asked Questions (FAQs)

What is the Unemployment Insurance Scheme?

It’s a scheme providing financial support to unemployed individuals in the UAE in exchange for a monthly premium paid during employment.

Who is eligible for the scheme?

All workers in the federal and private sectors, excluding certain categories, who have paid the premium for at least 12 months are eligible.

How can one apply for the scheme?

Workers can apply through the ILOE Insurance Pool website or its app.

How is the compensation calculated?

It’s based on the basic salary and the insurance premium paid during employment.

What are the reasons for suspension of the compensation?

Dismissal due to disciplinary reasons, fraud in the claim, or working in a fictitious establishment can lead to suspension.

Conclusion

Navigating through job loss can be daunting, but the UAE’s Unemployment Insurance Scheme can alleviate the financial stress. By understanding the application process, eligibility criteria, and regulations, you can ensure that you’re well-equipped to secure your financial stability during a challenging time.

 

 

 

 

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