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Unemployment Insurance Scheme

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Staff Writer, TLR

Published on July 14, 2023, 17:41:00

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federal government private sector employees must subscribe

The federal government and private sector employees must subscribe to the UAE's new social security support program from January 1st, 2023. The Ministry of Human Resources and Emiratization (MoHRE) signed an agreement with 9 local insurance companies that sets up the framework for the Unemployment Insurance Scheme.

The new unemployment insurance law is an essential part of the legislative and legal structure that the government is keen to develop to meet the requirements of the national economy. This supports the UAE’s endeavour to be the next capital of the future, and a global incubator for investments, which can be achieved through economic, social development and the empowerment of human capital.

 The insurance program is divided into 2 categories — The first covers employees who earn a basic salary of AED 16,000/- or less per month, which is set at AED 5/- per month, or AED 60/- annually and the second is for workers earning a monthly basic salary of AED 16,000/- or more, which is set to AED 10/- per month, or AED 120/- annually.

 The unemployment insurance payments will be made by employees either monthly, quarterly, half-yearly, or on an annual basis and the value of the insurance policy is subject to value-added tax (VAT).

Insured employees who lose their job must submit their claims through three approved claim channels: the insurance pool’s e-portal, smart application, and call centre within 30 days from the date of unemployment. Compensation will be paid within 2 weeks from the date of the claim and capped at a maximum of 3 months per claim. Employees can subscribe to the insurance program in several ways, including the insurance pool’s website, smart application, bank ATMs, kiosk machines, business service centres, money exchange companies, as well as du and Etisalat or by SMS.

Employees are eligible for the jobless payment if they have worked and subscribed for at least 12 months to the insurance program, as long as they have not been dismissed for disciplinary reasons or because they resigned. The insured employees are also not eligible for the payment if they have left the country or started a new job. Investors, such as owners of the establishments in which they work, domestic helpers, part-time employees, workers under the age of 18, and retirees who receive a pension and have joined a new job, will not be covered by the insurance program.

The new system aims to provide a social security program that ensures the sustainability of a decent life for Emiratis and resident employees during their unemployment period and will reduce business risks. It also creates a safety net that supports employees in their career path and ensures their livelihood by relying on mechanisms that do not incur additional costs for employers.

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