Stock Dubai office staff working street
Dubai office staff working Image Credit: Clint Egbert/Gulf News

Dubai: Employees in the UAE will be able to claim cash compensation as a form of social security if they have been terminated from their job after the new Unemployment Insurance Scheme comes into effect from January 1, 2023.

On Wednesday, November 2, the Ministry of Human Resources and Emiratisation (MOHRE) announced that scheme would be available to federal government and private sector employees, where the employees would need to subscribe to it, to receive a salary for up to three months in case they lose their job.

In another announcement on its social media channels on November 9, MOHRE added that subscription to the newly announced scheme is mandatory when it comes into effect next year. 

But how will your insurance coverage be calculated? And how can you subscribe to the scheme? Here is all you need to know.

Who can subscribe to the Unemployment Insurance Scheme?

The Unemployment Insurance Scheme applies to expats and Emiratis in the UAE's federal and private sectors. To be eligible to receive compensation under the insurance scheme, you must complete a minimum of 12 consecutive months in your previous job, calculated from the day you subscribed to the insurance scheme.

Categories exempt from the Unemployment Insurance Scheme
The following workers are not eligible to subscribe to the scheme:
• Investors (owners of the establishments in which they work)
• Domestic helpers
• Part-time employees
• Juveniles under the age of 18
• Retirees who receive a retirement pension and have joined a new job.

When are you entitled to receive a compensation?

You are entitled to receive a compensation under the scheme if you have suffered job loss due to reasons beyond your control.

When are you not entitled to receive a compensation?

According to MOHRE, there will be no compensation for workers:

• dismissed for a disciplinary reason.
• who have resigned from their job.
• who have left the UAE
• who have joined a new job.

How is the insurance pay out calculated?

According to MOHRE, the insurance coverage compensation is calculated on a monthly basis at the rate of 60 per cent of the basic salary and the compensation salary is given for a maximum of three months from the date of unemployment.

The insurance scheme is divided into two categories:

Category 1:

• Employees who are earning a basic salary of Dh16,000 or less.
• Insurance cost: Dh5 per month (or Dh60 annually)
• Monthly compensation: 60 per cent of your basic salary, up to Dh10,000

Category 2:

• Employees earning Dh16,000 and above
• Insurance cost: Dh10 (or Dh120 annually)
• Monthly compensation: 60 per cent of your basic salary, up to Dh20,000

As per MOHRE, employees who work on a commission basis can also subscribe to the scheme.

While the insurance cost is Dh5 per month or Dh10 per month – depending on the category – the payment can be made by the employee monthly, quarterly, half-yearly, or on an annual basis. The value of the insurance policy is subject to value-added tax (VAT).

You can apply for claims under the insurance scheme through the website of ‘The Insurance Pool’ – or through the call centre – 800 382467.

‘The Insurance Pool’ is a group of UAE-based insurance companies and is managed by the Dubai Insurance Company. It was established in 2018 as the legal entity responsible for providing insurance coverage to workers insured under the UAE's Workers Protection Programme.

Nine Entities that provide insurance policy
Dubai Insurance Company is the representative of the insurance pool, which consists of 9 national insurance companies:
1. Dubai Insurance Company
2. Abu Dhabi National Insurance Company
3. Al Ain Ahlia Insurance Company
4. Emirates Insurance Company
5. National General Insurance Company
6. Orient Insurance
7. Abu Dhabi National Takaful Company
8. Oman Insurance Company
9. Orient UNB Takaful Company

How can I claim the insurance?

MOHRE has stated that the insured employee must submit the claim for the compensation within 30 days from the date of unemployment.

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