Q&A: UAE's Unemployment Insurance Scheme Explained
Q1: What is the aim of the new Scheme? Who does it apply to?
The Unemployment Insurance Scheme aims to provide a decent compensation to persons who have become unemployed, for a limited period of time, until alternative job opportunities become available or they are employed again.
The unemployment insurance scheme applies to all employees of both private and public sectors.
Q2: For how long will the compensation be paid?
The unemployment insurance compensation will be provided for 3 months only.
In order to be eligible to claim compensation, the unemployed:
- Should be subscribed in the scheme for at least ( 12 ) consecutive months.
- Should be committed to settling periodic insurance payments.
- Should not be dismissed from work for a disciplinary reason or had resigned.
- Should not use fraudulent methods or collude with the employer to claim benefits and compensation.
- Should be legally present in the country.
Q3: How is the compensation calculated?
The compensation will be calculated at 60% of the employee's base salary used or declared for the subscription in the unemployment insurance scheme.
However, the compensation is capped at AED /20,000/ per month.
Q4: What the scheme's subscription fees?
Employees will be divided into two main categories according to their base salary upon subscribing to the scheme:
- Category 1: Employees with base salaries up to AED /16,000/, the the subscription premium will cost AED 5 per month (AED 60/annum). For this category, the monthly compensation is capped at AED /10,000/.
- Category 2: Employees with base salaries equivalent to AED /16,000/ or more, the subscription premium will cost AED 10 per month (AED 120/annum). For this category, the monthly compensation is capped at AED /20,000/.
The subscription Premium may be paid monthly, quarterly, bi-yearly, or yearly through the approved subscription channels determined by MoHRE. These channels are: Insurance websites/Apps, Bank ATMs, Service Centers, Exchange Offices, Telecom Companies (Du/Etisalat), and SMS.
Q5: Is the subscription to the Scheme mandatory?
Yes. It is mandatory for all employees to subscribe to the scheme within (4) months of the enforcement of the law. Deadline for subscription ends on 27 January 2023 AD.
Failure to subscribe to the scheme may subject the employee to administrative fines up to AED /400/.
Nadim Al Jisr joined Thomson Reuters in 2014 as a Content Specialist, then moved to oversee the Westlaw Middle East platform and manage its growth. Nadim holds a Bachelor’s Degree in Law and has more than 10 years of experience as a legal consultant and litigator in Lebanon, Saudi Arabia and UAE. Nadim is native Arabic speaker and proficient in English and French. Nadim is currently completing his Master’s Degree in Law. Nadim is currently the Editorial Lead heading the MENA Content Team.