Understanding the new UAE Unemployment Insurance Scheme

The UAE’s unemployment insurance scheme came into effect on January 1, 2023. It is a form of insurance/social security that provides Emiratis and residents working in federal and private sectors financial support if they lose their jobs, as a result of termination by their employers. This is being done to align with global international standards.

How does it work?

Compensation Benefits

The monthly compensation is 60% of the average basic salary over the most recent 6 months prior to the Involuntary Loss of Employment. The two categories for compensation are;

Category A: A Basic
Salary 16,000 AED or below is required. The insurance cost will be 5 AED+ VAT/Month. Compensation Benefit up to 10,000 AED / month with up to 3 months /claim.

Category B: A Basic
Salary Above 16,000 AED is required. The cost of insurance will be 10 AED+VAT/ Month. Compensation Benefit up to 20,000 AED / month with up to 3 months /claim.

Maximum Period of Benefits

During the insurance period over the entire work life of the Insured in the United Arab Emirates the aggregate Claim Payment shall not exceed 12 monthly benefits (regardless of the number of Claims submitted).

Who is Eligible for subscription

Employees only. Investors – owners of establishments in which they work, domestic workers, temporary contract workers, juveniles under 18 years, and retirees who receive a pension and joined a new job are not eligible to subscribe to the insurance scheme.

Who pays for the insurance coverage?

Employees will pay for the unemployment insurance themselves. This can be paid either monthly, quarterly, half-yearly, or on an annual basis subject to VAT.

Channels for subscribing

Workers may subscribe to the scheme via ILOE Insurance Pool website and its app and any other channel which MoHRE may announce.