A new scheme was announced by the Ministry of Human Resources and Emiratisation (MOHRE) on Wednesday, November 2. Employees in the government and private sector would be able to subscribe to the scheme and receive a salary for up to three months if they lose their jobs.
The Unemployment Insurance Scheme will take effect on January 1, 2023, and it will allow employees to claim cash compensation if they have lost their jobs.
MOHRE also announced on its social media channels on November 9 that subscription to the newly announced scheme will be mandatory upon implementation next year.
Now let's talk about how your insurance coverage will be calculated. What is the process for subscribing to the scheme? The following information will help you understand.
Unemployment Insurance Scheme in UAE: Who can apply?
Unemployment insurance covers expats and Emiratis in both the federal government and the private sector. It is important to note that in order to be eligible for compensation under the insurance scheme, you must have completed a minimum of 12 consecutive months at your previous job, starting on the day you subscribed to the scheme.
A list of categories that are exempt from unemployment insurance
1. Investors (owners of establishments they work for)
2. Domestic workers
3. Employees who work part-time
4. Minors under the age of 18
5. Retirees receiving a retirement pension who have taken up new jobs.
In order to receive compensation, what conditions must be met?
Compensation can be received if you have lost your job for reasons beyond your control.
What are the circumstances under which compensation is not payable?
According to MOHRE, a worker will not be compensated if he or she has done any of the following:
1. Dismissed for disciplinary reasons.
2. Those who have resigned.
3. Those who have moved out of the UAE
4. Employees who have changed jobs.
Under the Unemployment Insurance Scheme, how is the insurance payout calculated?
As per MOHRE, insurance coverage compensation is calculated at the rate of 60 percent of the basic salary each month, and the compensation is payable for up to three months following unemployment.
The Unemployment Insurance Scheme is divided into two categories:
Category 1:
• Employees with a basic salary: AED 16,000 or less.
• Insurance costs: AED 5 per month or AED 60 per year.
• Monthly compensation: 60% of your basic salary up to AED10,000
Category 2:
• Employees with a basic salary: AED 16,000 and above.
• Insurance costs: AED10 or AED120 per year.
• Monthly compensation: 60% of your basic salary, up to AED 20,000
It is also possible for commission-based employees to enroll in the program, as per MOHRE.
How to File an insurance claim
Insurance costs can be paid monthly, quarterly, half-yearly, or annually by the employee. The insurance costs are AED 5 or AED 10 per month, depending on the category. Insurance policies are subject to value-added tax (VAT).
'The Insurance Pool' provides an online and offline platform for filing insurance claims. This insurance pool is managed by the Dubai Insurance Company and is made up of a number of UAE-based insurance companies.
Visit 'The Insurance Pool' website "dubins-wpp.ae" or call The Insurance Pool's call center at 800 382467 to file an insurance claim.
Unemployment insurance policy providers in the UAE
1. Dubai Insurance Company
2. Abu Dhabi National Insurance Company
3. Al Ain Ahlia Insurance Company
4. Emirates Insurance Company
5. National General Insurance Company
6. Orient Insurance
7. Abu Dhabi National Takaful Company
8. Oman Insurance Company
9. Orient UNB Takaful Company
How to claim insurance?
In accordance with MOHRE guidelines, the insured employee must file a claim for unemployment compensation within 30 days of being unemployed.
Upon the date of the claim, compensation will be paid within two weeks of the date of the claim, and the maximum claim time period will be three months.
Objectives of the Compensation
1. The main objective of this scheme is to provide the person with income for a limited period.
2. Enhance the competitiveness of the labor markets.
3. Provide social protections.
4. Have a knowledge of the economy.