Mandatory June 30 deadline for UAE Unemployment Insurance scheme enrolment
ALBAWABA – The government of the United Arab Emirates (UAE) recently signed an agreement with nine local companies to operate and fund the UAE Unemployment Insurance scheme, launched January 2023, with the deadline for enrolment coming up on June 30.
Employees are required to sign up by the end of June, to benefit from the safety net the UAE Unemployment Insurance scheme provides employees working in the country.
Otherwise, a AED400 fine is payable by those who do not comply, Arabian Business confirmed.
What you need to know about the UAE Unemployment Insurance scheme
The purpose of the policy is to provide a safety net for private sector and federal government employees working in the UAE.
The UAE Unemployment Insurance scheme compliments recent changes to the immigration rules, which allow foreign workers to remain in the UAE for up to six months after visa cancellation.
Coupled with the six-month visa grace period, the UAE Unemployment Insurance scheme makes it easier for expats in the UAE to find new work.
Scope of coverage in the UAE Unemployment Insurance scheme
The scheme applies to all workers in the private and federal sectors except:
Investors, business owners who own and manage their businesses themselves
Domestic workers
Employees on a temporary basis
Juveniles under the age of 18
Retirees who receive pension and have joined a new employer.
Costs of enrolment in the UAE Unemployment Insurance scheme
There are two schemes in which employees may enrol, depending on their salaries.
Workers with basic salaries of AED16,000 or less will need to pay a monthly insurance premium of AED5, or AED60 annually. The compensation for this category does not exceed a monthly amount of AED10,000.
Workers with basic salaries exceeding AED16,000 will need to pay AED 10 per month, or AED 120 annually. The compensation for this category does not exceed AED 20,000 monthly.
Insured workers may, in coordination with the insurance company, subscribe to additional benefits in addition to the above basic packages.
Notably, the value of the insurance policy is subject to Value-Added Tax (VAT).
How to subscribe in the UAE Unemployment Insurance scheme
Workers can subscribe through the Involuntary Loss of Employment (ILOE) Insurance Pool website and its app. MoHRE also set up other channels such as money exchange outlets and bank ATMs as venues to register.
MoHRE published a video tutorial on its social media platforms encouraging workers to sign up for the scheme.
Cashing in your UAE Unemployment Insurance policy
The worker must submit the claim within 30 days from the date of their employment termination. The insurance company will have two weeks, from receiving the claim, to transfer the compensation to the insured’s account.
The insurance providers must process the insurance claims in accordance with the terms and conditions of the insurance policy and the applicable legislation of the Central Bank of the UAE.
Compensation will be paid from the date the employee loses their job and will receive payments, as specified above, for three months or until they finds a job, whichever comes first.
Conditions apply to the UAE Unemployment Insurance policy
Eligibility to cash in your UAE Unemployment Insurance policy depends on a number of factors:
The worker must have been subscribed to the insurance scheme for at least one year (12 months).
The worker must not have been dismissed on disciplinary grounds from his place of work.
The worker is also subject to a cap of 12 months of compensation in total.
The worker will no longer be eligible or entitled to receive compensation if they leave the country or find a new job.
With respect to the employees of the federal government, the Federal Authority for Government Human Resources will implement the mechanism of the ‘Unemployment Insurance Scheme’ in coordination with the Ministry of Finance.
