The Ministry of Human Resources and Emiratisation of the UAE announced that more than one million people have registered for the Unemployment Insurance Scheme which was launched in January 2023. The insurance scheme was launched by the UAE government to support workers who have lost their job unexpectedly. It provides low-cost job security to all the employees in the national government and in the private sector. The scheme was introduced to provide financial support to employees when they lose their jobs.
UAE Unemployment Insurance Scheme Started On 1st January 2023
The UAE government introduced the Unemployment Insurance Scheme as a means to provide income to the unemployed for a limited period of time. This measure taken by the UAE government targets to develop the competitiveness of Emiratis in the labor market.
The scheme was made open to the employees from January 1, 2023, onwards. It was found that more than 60,000 employees signed up for the scheme in the first two days. And now, within a short period of time, the number of workers subscribing to the scheme has surpassed one million.
The Minister of Human Resources and Emiratisation, DR Abdulrahman Al Awar said that scheme was intended to create a positive impact on the labour market by attracting and empowering Emirati as well as international talents. Thus, they hope that the Unemployment Insurance UAE Scheme would serve as a pillar of the legislative infrastructure by providing a decent living for the unemployed and thus establishing a competitive knowledge economy.
He also reminded that those who are eligible to benefit from the scheme should subscribe to the scheme so as to get insurance coverage. The employers were also reminded to encourage their employees to get subscribed to the Unemployment Insurance UAE Scheme.
The scheme provides financial support to employees who have lost their job. This financial support given to the employees will be based on the monthly insurance premium paid by the employee during his period of employment. It can be utilized by all workers who belong to the federal and private sectors with some exceptions.
The scheme is not applicable to domestic workers, employees who are on a temporary contract, juveniles who are below the age of 18, pensioners who receive a pension and have joined a new job, and those investors and business owners who own and manage their own business.
The Unemployment Insurance UAE Scheme is available to all workers in two different categories. The first one is applicable to employees whose basic salary is AED 16,000 or below that. The monthly insurance premium to be paid by the employee in this category is AED 5 (AED 60 annually). Such employees will be receiving a compensation amount of up to AED 10,000 per month.
The second category is for those with a basic salary of more than AED 16,000. These employees need to pay an insurance premium of AED 10 per month (AED 120 annually). They will be getting a compensation amount not exceeding AED 20,000 monthly.
The employee can pay the premium amount either on a monthly basis or on a quarterly, half-yearly, or annual basis. The member must pay the monthly premium for at least 12 months continuously to be eligible for compensation for losing their job. On losing the job, the employee can claim the insurance amount within 30 days from the date of losing the job. The insurance will be processed within two weeks from the submission of the insurance claim request.
The compensation amount paid to the employee is calculated at a rate of 60 percent of the employee’s average basic salary in the last six months before losing his job. The monthly insurance will be paid to the insured worker for three months or until she or he gets a new job. All the employees are required to subscribe to this scheme compulsorily by June 30 of this year. Those who fail to subscribe to this scheme within the date provided will be given a penalty of AED 400.
Those workers who have registered in the insurance scheme when dismissed from their job because of disciplinary reasons that come under the Labour Law for employees in the private sector and Human Resources Law for the federal government employees will lose their eligibility for compensation. In addition, if the claim submitted by the insured worker contains any fraud or deceit or if the details furnished in the claim are found fictitious, such insured workers will also lose their compensation under the scheme.
The employees can subscribe to the Insurance Scheme through the Insurance Pool’s website or through its application, business service centers, money exchange companies, kiosk machines, and bank ATMs or through SMS and other channels specified by the Ministry of Human Resources and Emiratisation.
On introducing the Unemployment Insurance UAE Scheme, the Minister of Human Resources and Emiratisation said that the UAE gives much emphasis to uphold human dignity and this new scheme will strengthen the legislative system by protecting the rights of all the employees in the nation including both the Emiratis and the other residents of the UAE. This decision aims to strengthen the well-being of society by ensuring care for individuals at all levels.