Unemployment Insurance in the UAE: Benefits, Eligibility, and Claim Process
In the United Arab Emirates, the Unemployment Insurance Scheme, also known as the Involuntary Loss of Employment (ILOE) scheme, provides financial support to Emiratis and residents working in the federal and private sectors if they lose their jobs due to termination by their employers.
Subscription Categories and Costs:
The scheme is divided into two categories based on the employee’s basic salary:
- Category A: Employees with a basic salary of AED 16,000 or less. The monthly premium is AED 5 (AED 60 annually + VAT), with a maximum monthly compensation of AED 10,000.
- Category B: Employees with a basic salary exceeding AED 16,000. The monthly premium is AED 10 (AED 120 annually + VAT), with a maximum monthly compensation of AED 20,000.
Employees are required to pay the insurance premium for two years in a single payment.
Subscription Process:
Employees can subscribe to the scheme through various channels, including the ILOE Insurance Pool website www.iloe.ae and its app, as well as other platforms announced by the Ministry of Human Resources and Emiratisation (MoHRE).
Compensation Details:
To be eligible for compensation, the employee must have been subscribed to the scheme for at least 24 consecutive months. In the event of job loss (excluding resignation or dismissal for disciplinary reasons), the scheme provides a monthly compensation of 60% of the basic salary, subject to the maximum limits of the respective categories. The compensation is paid for a maximum of three months or until the individual finds new employment, whichever comes first.
Claim Process:
The employee must submit a claim within 30 days from the date of unemployment. The insurance company is required to process the claim and transfer the compensation within two weeks of receiving it.
Penalties for Non-Compliance:
From October 1, 2023, fines have been enforced for non-compliance:
- Failure to subscribe to the scheme results in a fine of AED 400.
- Failure to pay the insurance premiums for more than three months beyond the due date results in a fine of AED 200 and cancellation of the insurance certificate.
Unsettled fines within three months of the due date may be deducted from the employee’s wages through the Wages Protection System (WPS) or from end-of-service benefits.
Additional Considerations:
- Residency Requirement: To receive compensation, the insured must be legally residing in the UAE.
- Job Transition: The ILOE coverage is not linked to a specific job or employer. If an individual loses their job and subsequently finds new employment, the compensation will cease upon re-employment.
The Unemployment Insurance Scheme aims to provide a safety net for employees, ensuring financial stability during periods of involuntary unemployment and enhancing the attractiveness of the UAE’s job market.
Note: Each company has its own policies, and some provide insurance for employees. For further details, visit the official website. If there are any updates or changes, please email us.
