All You Need To Know About New Unemployment Insurance Scheme In The UAE
On November 2nd, the UAE’s Ministry of Human Resources and Emiratisation announced that the UAE unemployment insurance scheme will be mandatory from January 1, 2023, for both Emiratis and foreigners.
If Emiratis and residents lose their jobs, they will provide with a cash sum for three months through the social security support program, which was announced in May.
Ministry officials said that the system will ensure Emiratis and residents a decent life during unemployment, while also reducing business risks.
As of November 2nd, the ministry signed an agreement with nine insurance companies that will set up a framework for unemployment insurance in UAE and released more information about the program, including the cost and that it will be covered by employees.
In a statement on November 2nd, Minister of Human Resources and Emiratisation Abdulrahman Al Awar said that the new unemployment insurance law in UAE is an essential component of the government’s legislative and legal framework.
In this way, the UAE is supporting its efforts to become a leading hub for talent and companies and to become an investment hub through economic and social development.
What Is The New Unemployment Insurance Scheme?
A new federal law covering the scheme was announced in May by the Ministry of Human Resources and Emiratisation. Emiratis and foreigners employed in public and private sectors will receive a cash sum if they lose their jobs under this mandatory social security program.
How Does The Unemployment Insurance Scheme Work?
According to the ministry, employees will receive compensation for up to three months following the loss of their job and will be paid 60 percent of their basic salary, up to a maximum payment of Dh20,000 ($5,445) per month.
How Much Cost Does The Unemployment Insurance Scheme Cover?
The new unemployment insurance program in UAE consists of two categories. Employees earning less than Dh16,000 a month are classified under the first category. Employees earning a salary equal to Dh16,000 or more than $16,000 are classified under the second category.
Employees earning less than Dh16,000 per year will pay Dh5 per month or Dh60 per year for insurance coverage. Paying Dh10 a month, or Dh120 a year will be required for workers who earn Dh16,000 or more a month.
Who Will Be Paying The Insurance Coverage?
Unemployment insurance is paid by employees themselves. As explained by the ministry, payments can be made monthly, quarterly, half-yearly, or annually. There is also a VAT charge on the insurance policy value.
What Is The Amount Of Unemployment Insurance I’ll Receive If I Lose My Job?
Depending on your basic salary, you will receive unemployment compensation. Employees in the first category will receive a monthly cash sum of Dh10,000 and employees in the second category will receive Dh20,000. Based on the basic salary, it will be calculated at 60 percent.
In The Event That I Lose My Job, What Is The Process For Receiving Unemployment Compensation?
Within 30 days of losing their jobs, insured employees must submit their claims through three approved channels: the pool’s e-portal, smart application, and call center. Payment of compensation will occur within two weeks of the claim date, and each claim will be limited to three months in length.
The new social security support program becomes effective on January 1, 2023, for all federal government and private sector employees. A number of ways exist for employees to subscribe to the insurance program, including online, via a smart application, by bank ATM, kiosk machine, business service center, money exchange company, du and Etisalat, or by SMS, the ministry said. Employees may also be able to sign up for unemployment insurance through other channels at a later date, the ministry said.