UAE’s unemployment insurance explained: Types of schemes, salary categorisation, premiums, payout

All your questions answered about programme that offers financial support if you lose your job



File photo
File photo

Published: Thu 3 Nov 2022, 6:45 AM

Last updated: Wed 21 Dec 2022, 7:52 PM

[Editor's Note: This article — which was first published in November — explains the details that UAE employees need to know before the job loss insurance scheme becomes mandatory for all on January 1, 2023.]

Emiratis and expats employed in the private sector and federal government departments will soon get a form of social security if they suddenly lose their jobs. The Unemployment Insurance scheme will offer financial support of up to three months if an employee is terminated.

Here is all you need to know.

When can employees subscribe to the scheme?

They must sign up for the scheme from January 1, 2023.

What types of schemes are available? What are the premiums and compensation amounts for each?

There are two categories:

>> Those with a basic salary of Dh16,000 and less.

Premium: Dh5 per month or Dh60 annually

Compensation: Not more than Dh10,000 per month.

>> Those with a basic salary exceeding Dh16,000

Premium: Dh10 per month or Dh120 annually

>> Compensation: Not more than Dh20,000 per month.

Are payments made monthly? Who pays them – employees or employers?

The premiums can be paid monthly, quarterly, half-yearly, or annually. Premiums for the scheme are paid by the employees themselves and, therefore, do not pose any additional expenses on firms.

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How is compensation calculated?

Cash compensation for up to three months will be offered for each claim. The payout is calculated on a monthly basis at the rate of 60 per cent of the basic salary.

For how long will the compensation be paid?

From the date an employee loses the job, he/she will be paid for three months or until he/she finds a new job – whichever is earlier.

How soon will compensation be paid?

It will be paid within two weeks from the date of the claim and capped at a maximum of three months.

How can employees submit claims?

The claims must be within 30 days from the date of unemployment via the insurance pool’s:

- E-portal

- Smart application

- Call centre

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Are all employees eligible?

They become eligible only if they have worked and subscribed to the insurance scheme for at least 12 months. They must not have been dismissed for a disciplinary reason.

Employees are not eligible for compensation if they have left the country or joined a new job.

The employee who works on a commission basis may also subscribe to the scheme.

Which type of employees are excluded from the scheme?

Investors – owners of establishments in which he or she works

Domestic helpers

Employees with a temporary employment contract

Juveniles under 18 years of age

Retirees who receive a retirement pension and have joined a new job.

How can employees subscribe?

Employees may subscribe to the insurance scheme via the insurance pool’s website, smart application, bank ATMs, kiosk machines, business service centres, money exchange companies, du and Etisalat, SMS, or any other channel as decided by the MoHRE.

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