UAE workers must opt-in for unemployment insurance from 2023
The UAE has announced the prices for its new unemployment insurance for private and federal sector employees after signing an agreement with a group of nine local insurance companies.
The Ministry of Human Resources and Emiratization (MoHRE) announced on Wednesday that the scheme will go into effect from January 1, 2023. WAM reported on Wednesday that employees in the UAE must subscribe to the scheme from 2023. Employees who work on a commission basis can also opt-in to the government-backed scheme.
Some exemptions include investors, owners of establishments in which he or she works, domestic helpers, employees with a temporary employment contract, juveniles under the age of 18, and retirees who receive a retirement pension and have joined a new job.
Cost of Insurance:
The cost of insurance has been divided into two categories:
- Employees with a basic salary lower than $4,350 (AED 16,000) can contribute $1.3 (AED 5) per month toward insurance. Monthly compensation for this category will not exceed $2,720 (AED 10,000).
- Employees with a basic salary higher than $4,350 (AED 16,000) can contribute $2.72 (AED 10) per month toward insurance. Monthly compensation in this category will not exceed $5,440 (AED 20,000).
The contribution toward the unemployment fund can be made monthly, quarterly, half-yearly, or annually, and the value of the insurance policy is subject to value-added tax (VAT).
The compensation amount upon job loss can be claimed at 60% of the basic salary.
Employers are not required to bear the cost of subscribing to unemployment insurance.
Application for unemployment insurance:
The insurance will be made available through various platforms, information from MoHRE said.
- Insurance Pool’s website or mobile application – The Insurance Pool was established in 2018 to be the legal entity responsible for providing insurance coverage to the workers insured under the United Arab Emirates Workers Protection Program. Dubai Insurance Company is the administrator of the Insurance Pool, which is also under the supervision of MoHRE.
- Bank ATMs and Kiosk machines
- Business service centres
- Currency exchange firms
- Telecom providers du and Etisalat
- SMS
Claiming unemployment insurance:
The monetary unemployment benefit can be claimed through the Insurance Pool’s website, mobile application, or call centre.
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.
