UAE: 24% of cases did not meet conditions for end-of-service benefits in 2022
Pension authority says Emiratis must spend at least a year in their job for entitlement
Abu Dhabi: Insured Emiratis need to complete a minimum of one year in their jobs in order to be entitled to receive their end-of-service payment from the General Pension and Social Security Authority (GPSSA).
GPSSA said the minimum period for an insured individual to spend at an entity is 11 months and one day, given that the ‘one day’ is considered ‘a month’ as per the UAE Pension Law.
According to GPSSA’s 2022 statistics, a total of 1,461 out of 6,138 Emiratis were not entitled to receiving their end-of-service benefits due to terminating their employment contracts in a period less than one year, resulting in the GPSSA recording 24 per cent of end-of-service cases not meeting the proper entitlement conditions.
How benefits are calculated
The UAE Pension Authority explained that the longer the employment duration is, the more the benefits are for an insured individual, and this includes an increase in the value of the end-of-service reward, noting that the salary by which a bonus is calculated is the salary of the pension account itself, where an insured individual receives a 1.5 salary for each of the first five years of service, a two months’ salary for each of the following five years of service and a three months salary for each of the next five years of service.
During this period, insured persons receive all their insurance rights; as an example, the maximum pension of 100 per cent is granted to individuals exposed to a work-related disability or in case the insured passes away, which is exactly what an insured individual whose worked and contributed for 35 years receives. Additionally, insured Emiratis may chose to add employment periods when shifting entities.
Registration verification mandatory
The GPSSA calls on all its new, current and previous members to verify their registration and contribution payments from the moment they are recruited in an entity, since there were numerous cases reported whereby employees resign for any reason and upon joining a new entity discover that they are unable to join unless they pay their registration and contributions first.
In such cases, both the employee and the previous employer are forced to pay due contributions retroactively and bear the value of the additional amounts as a result of the delay in paying the contributions. This puts the insured under risk of delaying or even losing the opportunity to be recruited by another entity.