UAE’s unemployment insurance explained: Types of schemes, salary categorisation, premiums, payout

[Editor's Note: This article — which was first published in November — explains the details that UAE employees need to know before the job loss insurance scheme becomes mandatory for all on January 1, 2023.]

Emiratis and expats employed in the private sector and federal government departments will soon get a form of social security if they suddenly lose their jobs. The Unemployment Insurance scheme will offer financial support of up to three months if an employee is terminated.

Here is all you need to know.

When can employees subscribe to the scheme?

They must sign up for the scheme from January 1, 2023.

What types of schemes are available? What are the premiums and compensation amounts for each?

There are two categories:

>> Those with a basic salary of Dh16,000 and less.

Premium: Dh5 per month or Dh60 annually

Compensation: Not more than Dh10,000 per month.

>> Those with a basic salary exceeding Dh16,000

Premium: Dh10 per month or Dh120 annually

>> Compensation: Not more than Dh20,000 per month.

Are payments made monthly? Who pays them – employees or employers?

The premiums can be paid monthly, quarterly, half-yearly, or annually. Premiums for the scheme are paid by the employees themselves and, therefore, do not pose any additional expenses on firms.

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How is compensation calculated?

Cash compensation for up to three months will be offered for each claim. The payout is calculated on a monthly basis at the rate of 60 per cent of the basic salary.

For how long will the compensation be paid?

From the date an employee loses the job, he/she will be paid for three months or until he/she finds a new job – whichever is earlier.

How soon will compensation be paid?

It will be paid within two weeks from the date of the claim and capped at a maximum of three months.

How can employees submit claims?

The claims must be within 30 days from the date of unemployment via the insurance pool’s:

- E-portal

- Smart application

- Call centre

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