In recent years, the UAE has introduced several measures to improve the economic and social security of its residents. Among these is the mandatory Unemployment Insurance Scheme or the Involuntary Loss of Employment (ILOE) scheme.
Here’s a complete guide to understand, navigate and learn how to utilise this scheme.
What Is the UAE Unemployment Insurance Scheme?
The UAE Unemployment Insurance Scheme, or ILOE, is a social security initiative designed to provide financial aid to individuals working in federal and private sectors who lose their jobs involuntarily due to termination by their employers. The scheme aims to assist those individuals while they seek new employment.
The scheme operates based on contributions made by employees during the period of employment. These contributions are usually a percentage of the employee’s monthly salary.
In addition to supporting the unemployed, the scheme contributes to the enhancement of the UAE labour market’s competitiveness and attracting international talents to build a knowledge-based economy.
But before going into detail about how to subscribe to and claim this insurance scheme, it’s worth noting that the following types of workers can’t benefit from it:
- Investors and business owners (those working in a company they own)
- Domestic workers
- Individuals under the age of 18
- Temporary-contract workers
- Retirees receiving pensions who joined a new employer
What Are the Eligibility Criteria for the UAE Unemployment Scheme?
Federal and private sector employees are eligible for ILOE if they have worked and subscribed for the scheme for at least 12 months. If the employees lost their jobs due to disciplinary reasons, left the country, or joined another company, they won’t be eligible for unemployment compensation.
Registering with ILOE
As per the last Ministry of Human Resources and Emiratisation (MOHRE) announcement, employees eligible for the Unemployment Scheme are obligated to subscribe to the insurance. Otherwise, an AED 400 fine will apply.
To register, visit the ILOE official website, then click on “Subscribe Here”. You’ll be taken to another page where you’ll be asked to specify whether you work in the private sector, the federal government sector, or a company not registered with MOHRE. Once you choose, you need to provide a UID or Emirates ID and a phone number. An OTP will be sent to your registered number.
After entering the OTP, a window will pop up stating your basic salary and the monthly policy premium. Check the box to confirm the information. Next, you need to select the premium schedule; annual, semi-annual, quarterly, or monthly. Finally, enter your email to receive the certificate and pay using your card. A hard copy of the certificate will also be sent to you in mail.
You can also subscribe to the UAE Unemployment Insurance Scheme via:
- Al Ansari Exchange
- Telecommunication bills
- Kiosk machines
- SMS and telecommunication bills
- Bank ATMs and applications
- Businessmen service centres (Tawjeeh and Tasheel)
If you choose to subscribe through the above channels, you will be charged a fee.
Compensation Options
Insured employees can acquire cash compensation worth 60% of their basic salary in the last six months prior to the job loss. The compensation will cover up to three months of unemployment if the insured has subscribed to the unemployment scheme for at least 12 consecutive months.
What Is the Subscription Cost?
The UAE Unemployment Insurance scheme is divided into two categories. The amount deducted for the insurance differs based on the category.
Category A
This category covers employees with a basic salary of AED 16,000 or less. Individuals falling under this category have to pay a monthly insurance premium of AED 5 plus VAT/month, or AED 60 annually and will get a compensation mounting up to AED 10,000 for up to three months.
Category B
Category B covers employees with a basic salary above AED 16,000. They will be required to pay AED 10 per month plus VAT/month or AED 120 annually. Employees fitting this category can get up to AED 20,000 for up to three months.
Claiming ILOE Insurance
Individuals seeking to claim benefits under the UAE Unemployment Insurance scheme are required to submit their claim within 30 days of becoming unemployed. Upon receiving the claim, the insurance company is obligated to process the compensation and transfer it to the insured account within a two-week period.
Insurance providers must adhere to the terms and conditions stipulated in the insurance policy, as well as the regulations set forth by the Central Bank of the UAE.
Compensation commences from the date the insured individual loses their job, and it continues either for a duration of three months or until the individual secures a new job, depending on which event occurs first.
The Ministry of Human Resources and Emiratisation (MOHRE) is responsible for monitoring adherence to the insurance policy’s terms and conditions by insurance companies. Any breach detected will be reported by the ministry.
In the case of federal government employees, the implementation of the Unemployment Insurance scheme is managed by the Federal Authority for Government Human Resources. This is done in coordination with the Ministry of Finance to ensure the proper implementation of the scheme.
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