Abu Dhabi: The United Arab Emirates’ (UAE) new employment insurance scheme is a mandatory requirement for citizen and foreign employees working in the public and private sectors to subscribe from January 1, 2023.
The Ministry of Human Resources and Emiratisation said the new plan, which was originally announced in May, provides compensation of up to three months for public and private sector employees who have lost their jobs.
Here is everything you need to know about the new initiative
What is the unemployment insurance scheme?
In May 2022, the Ministry of Human Resources and Emiratisation announced a new federal law covering the plan.
The system would ensure the sustainability of a decent life for citizens and residents during their unemployment period and would reduce work risks.
On Wednesday, November 2, the ministry signed an agreement with nine insurance companies that would set a framework for the unemployment insurance plan, and released more details about the program, including the cost that employees will pay for it.
How does it work?
The compensation will be paid for a maximum period of three months from the date the employee lost the job, and will be calculated at 60 per cent of his basic salary with a maximum of 20,000 Dirham (Rs 4,45,313) per month, according to the ministry.
Is it mandatory for everyone working in the UAE?
No it is not. The insurance program does not cover investors, such as business owners, home workers, part-time employees, workers under 18, and retirees who receive a pension who have joined a new job.
When to claim?
The claim must be made within 30 days from the date of unemployment.
The compensation will be eligible if employees work and subscribe to the scheme for at least 12 months. The employee must also not have been dismissed for a disciplinary reason or have resigned.
Employees who leave the country are not eligible to receive the benefit.
How to apply for the unemployment insurance?
The insurance will be made available through various platforms, information from MoHRE said.
- Insurance Pool’s website and its smart application
- Bank ATMs and Kiosk machines
- Business service centres
- Money exchange companies
- du and Etisalat
- SMS
- Other channels that MOHRE specifies with the service provider (insurance company)
Entities that provide insurance policy
Dubai Insurance Company is the representative of the insurance pool, which consists of 9 national insurance companies:
- Dubai Insurance Company
- Abu Dhabi National Insurance Company
- Al Ain Ahlia Insurance Company
- Emirates Insurance Company
- National General Insurance Company
- Orient Insurance
- Abu Dhabi National Takaful Company
- Oman Insurance Company
- Orient UNB Takaful Company
Subscription fees and compensation
First category
- Basic salary of 16,000 Dirham and less
- The insurance cost: 5 Dirham per month
- Monthly compensation will not exceed 10,000 Dirham
Second category
- Basic salary exceeding 16,000 Dirham
- The insurance cost: 10 Dirham per month
- Monthly compensation will not exceed 20,000 Dirham
Who pays for insurance coverage?
The employees themselves will pay for unemployment insurance. This can be paid either monthly, quarterly, semi-annually or annually, the ministry said. The value of the insurance policy is also subject to VAT.
