UAE Insurance Scheme: Grace Period Announced For Employees

The unemployment insurance scheme offered by the UAE government started its subscription on January 1, 2023. The employees who work in federal departments and private sectors who are eligible for the scheme will get a grace period of six months ending on June 30, 2023, for subscribing to the scheme.

The Involuntary Loss of Employment (ILOE) scheme was planned last year as part of the efforts of the UAE government to provide financial assistance to unemployed residents for a period of 3 months.

Subscription to the scheme started on January 1, 2023, for Emiratis 

The new notification regarding the grace period of six months was put up on the official website and it stated that people who don’t subscribe to the scheme till June 30 of this year will have to pay a fine of Dh400.   

The scheme was initiated by the Ministry of Human Resources and Emiratisation (MoHRE) and it has very low subscription plans that range from Dh5 to Dh10 upon losing the job, the person would get around sixty percent of his last salary for three months. The scheme does come with certain conditions on the nature of unemployment.

First and foremost, the insurer must be subscribed to the scheme for a minimum period of twelve months. The person must not be fired from the job because of disciplinary actions or such activities. There are certain job profiles that have been exempted from the Involuntary Loss of Employment scheme.

Employees working in free zones, Domestic help, Kids under the age of 18, Contract workers, Investors who are owners of the companies, retired persons, and temporary contract workers are all not eligible under this scheme. The eligible individuals will have a number of benefits under the scheme. 

1. Sixty percent of the average basic salary that has been given to the employee in the last six months prior to the job loss. 
2. The individuals under Category A (base salary below AED 16,000) can receive maximum benefits of up to AED 10,000 per month. The monthly premium for this category is AED 5 per month plus VAT. 
3. Category B (base salary of AED 16,000 and above) persons are eligible to get a maximum monthly benefit of up to AED 20,000. The monthly premium is AED 10 plus VAT per month. 
4. The maximum benefit for any claim would be for a period of three consecutive months when the individual is unemployed. 
5. The total benefit period of the insurer will not exceed a period of twelve months for the entire work life of the individual being employed in the UAE. 

The individual can use multiple platforms to subscribe to the ILOE scheme such as Bank ATMs and kiosk machines, Business service centers, DU and Etisalat, the official ILOE website and smartphone application, Money exchange companies, and SMS service.

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Also, in order to be eligible for the ILOE scheme, the official website notifies that the insurer must fulfill certain criteria. 

1. The insurer must pay the subscription fees for a minimum period of twelve consecutive months. 
2. The employee should not be dismissed from the firm on disciplinary terms under the Labor Relations Law and Human Resources Law of the federal government or any such connected legislation. 
3. The claim for ILOE should be submitted within 30 days from the date of loss of employment. 
4. The insurer has the responsibility to prove that the reason for unemployment was not purposeful resignation. 
5. The insurer will have to pay all the insurance premium dues on time. 
6. There should not be any existing complaint against the insurer regarding absence from work. 
7. The ILOE benefits would not be given to insured individuals who were part of any form of fraud or deceit and if the claim for the insurance had been created using a fictitious work profile. 
8. The unemployment must not be due to any sort of non-peaceful protests or labor strikes which resulted in violence or not.  

The following is a step-by-step guide to subscribe to the ILOE using their official website:

1. Open the ILOE official website at www.iloe.ae 
2. Click on the ‘Subscribe here’ button. 
3. Choose your employment sector under the ‘Individual’ section. 
4. Use your Emirates ID number to get a one-time password on your smartphone. Log in using these details. 
5. The welcome screen will now show your monthly salary and the eligible scheme under which you can apply for the insurance. 
6. Check the box ‘I confirm my personal details are correct’. 
7. Next, you need to select the insurance coverage period. You can choose a one or two-year period. 
8. Here, you have to select how you choose to pay the premium amount. It is available in annual, semi-annual, quarterly or monthly payment options. 
9. Carefully read through the terms and conditions and click accept if you are willing. 
10. Type in your valid e-mail ID through which you wish to receive your insurance certificate. 
11. Complete the payment by entering your Bank card details. 
12. Once the payment is complete, the insurance certificate will be auto-generated and downloaded in a PDF format.