New Unemployment Insurance Scheme announced in the UAE

Ministry of Human Resources and Emiratisation (MoHRE) has announced the new Unemployment Insurance Scheme for the federal government and private sector employees.

According to the Ministry, employees will be able to subscribe to the new Unemployment Insurance Scheme from January 1, 2023. The new policy has been disclosed on Wednesday Nov 2, 2022.

How Much Unemployment Insurance Scheme Cost?

The New Unemployment Insurance Scheme consists of two main categories. The first category is cheaper and available for those employees with a basic salary of Dh16,000 and less. These employees will be able to subscribe the unemployment insurance scheme with Dh5 per month or Dh60 annually. Thus the insurance premium for this category is cheaper than the second category.

The second category is for those employees with a basic salary more than Dh16,000. These employees will be able to subscribe the unemployment insurance scheme with Dh10 per month or Dh120 annually.

How compensation is calculated?

First category insurance employees will get up to Dh10,000 as monthly compensation and second category insurance employees will get up to Dh20,000. This is calculated according to the 60 per cent of the basic salary.

How to Pay premium for the New Unemployment Insurance Scheme?

Employees can pay the premium monthly, quarterly, half-yearly, or on an annual basis. It should be kept in mind that the value of the insurance policy is subject to value-added tax (VAT). Employees will have to pay the insurance premium themselves so this scheme has no effect on the balance sheet of any firm.

How compensation is claimed?

If the insured employ loses his job in the UAE due to “reasons beyond his control”, he can claim cash compensation for up to three months. Employees can claim compensation via three approved channels.

• The insurance pool’s e-portal
• smart application
• call centre

It should be remembered that the compensation claim must be submitted within 30 days from the date of unemployment. To subscribe, employees can use pool’s website, smart application, bank ATMs, kiosk machines, business service centres, money exchange companies, du and Etisalat, SMS, or any other channel as decided by the MoHRE.

When will compensation be paid?

After the compensation is claimed by the unemployed, it takes maximum two weeks to approve and it continues for 3 months.

Only those employees are eligible for the payout have been doing job and subscribed to the insurance scheme for at least 12 months. An employee working on a commission basis may also subscribe to the scheme

Who can’t subscribe to the New Unemployment Scheme?

1. Employees dismissed for a disciplinary reason
2. Employees who have left the country or joined a new job
3. Investors
4. Owners of establishments in which they work
5. Domestic helpers
6. Employees with a temporary employment contract
7. juveniles under 18 years of age
8. Retirees who receive a retirement pension and have joined a new job