What is the ‘Unemployment Insurance scheme’?

The Unemployment Insurance scheme is a form of insurance/social security that provides Emiratis and residents working in the federal and private sectors, financial support if they lose their jobs, as a result of termination by their employers.

The financial support will be given in exchange of a monthly insurance premium paid by the worker during his employment. Read more about the scheme.

Scope of the scheme

The scheme applies to all workers in the private and federal sector except:

• investors, business owners who own and manage their business themselves
• domestic workers
• employees on a temporary basis
• juveniles under the age of 18
• retirees who receive pension and have joined a new employer.

Cost of subscription

• 1-Workers with a basic salary of AED 16,000 or less will need to pay a monthly insurance premium of AED 5, i.e. AED 60 annually. The compensation for this category must not exceed a monthly amount of AED 10,000.
• 2-Those with a basic salary exceeding AED 16,000 will need to pay AED 10 per month, i.e. AED 120 annually. The compensation for this category must not exceed AED 20,000 monthly.

The worker may choose to pay the premium on a monthly, quarterly, half-yearly or on an annual basis.

The insured worker may, in coordination with the insurance company, subscribe to additional benefits in addition to the above basic package.

The value of the insurance policy is subject to VAT.

Channels for subscribing

Workers may subscribe to the scheme via ILOE Insurance Pool website and its app and any other channel which MoHRE may announce.

Federal government and private sector employees must subscribe to the scheme from 1 January 2023.

Related links:

• How to subscribe to Unemployment Insurance scheme (PDF, 1.03 MB).

Entities that provide insurance policy

Dubai Insurance Company is that representative of the insurance pool, which consists of 9 national insurance companies:

• Dubai Insurance Company
• Abu Dhabi National Insurance Company
• Al Ain Ahlia Insurance Company
• Emirates Insurance Company
• National General Insurance Company
• Orient Insurance
• Oman Insurance Company
• Orient UNB Takaful Company

Filing for a compensation claim

The worker must submit the claim within 30 days from the date of his/her unemployment. The insurance company has two weeks, from receiving the claim, to transfer the compensation to the insured’s account.

The insurance providers must process the insurance claims in accordance with the terms and conditions of the insurance policy and the applicable legislations of the Central Bank of the UAE.

Compensation will be paid from the date he/she loses the job and will be paid for 3 months or until he/she finds a job, whichever is earlier.

MoHRE will report any breach to the terms and conditions of the insurance policy by the insurance companies.

With respect to the employees of the federal government, Federal Authority for Government Human Resources will implement the mechanism of the ‘Unemployment Insurance Scheme’ in coordination with Ministry of Finance.

Find out how to submit ILOE Claims (PDF, 2.70 MB).

Eligibility

To be eligible for the compensation, the worker must have been paying the monthly premium for  at least 12 consecutive months.

Suspension of the compensation

The insured worker will lose his/her eligibility for compensation if any of the following situations occur:

• he/she was dismissed from work for disciplinary reasons under the UAE’s Labour Law in the private sector (Federal Decree Law No. 33 of 2021 Regarding the Regulation of Employment Relationship and its amendments) and the Human Resources Law in the federal government, in addition to any applicable legislations
• there has been fraud or deceit involved in his/her claim
• the establishment where he/she works is fictitious.

Failure to subscribe to and pay for the Unemployment Insurance scheme

From 1 October 2023, the UAE Government will enforce fines on workers who do not subscribe to, or comply with the payments for the Unemployment Insurance scheme. This deadline is as per Ministerial Resolution No. 340 of 2023 Amending the Deadline for Imposing Fines Related to the Unemployment Insurance System Contained in Ministerial Resolution No. 604 of 2022 on Unemployment Insurance System (PDF, 130 KB).

Fines

• If the worker does not subscribe to the Unemployment Insurance scheme before 1 October 2023, he/she will be fined AED 400.
• If the insured worker fails to pay his/her insurance premiums for more than three months beyond the due date, he/she will be fined AED 200 and his/her insurance certificate will be cancelled.
• If the worker does not settle his/her fine/s within three months of the due date, the fine will be deducted from his/her wages through the Wages Protection System (WPS) or from his/her end of service benefits, or any other method approved by Ministry of Human Resources and Emiratisation. 

Refer to Article 9 of the Ministerial Resolution No. 604 of 2022 Concerning Unemployment Insurance Scheme (PDF, 176 KB), for more details.

Check out ILOE Quick Pay service.

Objectives of the scheme

The insurance scheme aims to:

• provide the insured with income for a limited period of time during his/her unemployment
• enhance the competitiveness of Emiratis in the labour market
• provide social protection to ensure continued decent living for the unemployed
• achieve a competitive knowledge economy by attracting and retaining best international talent.

Regulations governing the ‘Unemployment Insurance Scheme’

• Federal Decree Law No. 13 of 2022 Concerning Unemployment Insurance Scheme (PDF, 507 KB)

• Cabinet Resolution No. 97 of 2022 Concerning the Procedures and Controls for Implementing Unemployment Insurance Scheme (PDF, 779 KB).