UAE unemployment insurance now Compulsory: How you can get AED20,000 a month?

UAE Unemployment Insurance Scheme 2023 Compulsion – How can you avail AED 20000 per month?

The UAE unemployment insurance scheme is a type of insurance/social security that offers Emiratis and residents financial assistance if they lose their jobs as a result of being fired by their employers in the public and private sectors. It aspires to establish a competitive knowledge economy by recruiting and keeping the greatest worldwide talent; while continuing to provide the unemployed with a good standard of living.

In this article, we will be talking about the unemployment insurance scheme UAE and how it is now mandatory. Accordingly, this financial assistance will be provided in exchange for the worker paying monthly premium insurance while they are employed. Let us see more:

1. What is the UAE unemployment insurance scheme law?
2. When will the UAE’s private unemployment insurance program debut?
3. UAE announces the requirement of unemployment insurance
4. UAE’s compulsory insurance might go as high as AED 120
5. Summary of the UAE unemployment insurance scheme law
6. How can Connect Legal help you?

1. What is the UAE unemployment insurance scheme law?

On October 11, 2022, the Ministry of Human Resources and Emiratization (MoHRE) publicly stated the start of the ‘Unemployment Insurance Scheme’ for government and private sector employees.

According to the announcement, for a period of three months following the date of unemployment, the policy compensation would be provided on a monthly basis. Estimated 60 percent of the employee’s basic pay and subject to a limit of AED 20,000 per month.

The authorities did not announce the new rule as mandatory; however, it did apply to all UAE federal employees as well as those in the private sector. With the exception of investors, domestic assistants, part-timers, retirees with pensions, and those who are younger than 18 years old.

2. When will the UAE’s private unemployment insurance program debut?

The UAE is introducing the new UAE unemployment insurance scheme with the goal of protecting federal government employees as well as those working in the private sector.

The Emirates News Agency (WAM) said on Tuesday that the new program, which was first announced in May, will offer employees financial compensation for a specific amount of time not to exceed three months for each case in the event of termination of contract for circumstances beyond their control.

In accordance with Federal Decree-Law No. 13 of 2022 and the pertinent Cabinet Resolutions, the Ministry of Human Resources and Emiratization (MoHRE) starts the new plan with a team of nine local insurance firms to establish the structure of the new UAE unemployment insurance scheme.

3. UAE announces the requirement for unemployment insurance

-According to the Ministry of Human Resources and Emiratization, buying the UAE unemployment insurance scheme will be mandatory in January.

-The insurance program splits into two groups; the first of which covers those with basic salaries of AED 16,000 or less. Consequently, the monthly insurance premium for a worker with insurance in this group is AED 5, or AED 60 annually. On the other hand, the second category consists of people whose base pay exceeds AED 16,000; in this case, insurance costs AED 10 per month, or AED 120 per year.

-The employee has the option of making the payment on a monthly, quarterly, half-yearly, or annual basis. In addition, Value-Added Tax is applicable to the insurance policy’s purchase price (VAT). A commission-based employee can also enroll in the program.

-A crucial component of the legislative and regulatory framework that the government is eager to create to fulfill the demands of the national economy is the current unemployment insurance law. This supports the UAE’s efforts to become the next capital of the world and a hub for talent, businesses, and investments on a global scale, which may be achievable through the development of the economy and society and the empowerment of human capital.

-The new program stipulates that the first and second categories’ monthly compensation amounts cannot surpass AED 10,000 and AED 20,000, respectively. Therefore, the government provides insurance coverage payment monthly at 60% of the base pay for a limit of three months from the date of layoff for each claim.

-Additionally, the worker must file the claim via one of the three authorized claim channels; either the insurance pool’s call center, smart application, or e-portal. They need to file the claim within 30 days of the unemployment date.

4. UAE’s compulsory insurance might go as high as AED 120

-Employees can use the UAE insurance program in one of two categories: those with a basic salary of less than AED 16,000 or those with a basic salary of more than AED 16,000.

-Those who fall into the first type will pay AED 5 per month for insurance, or AED 60 per year. Nevertheless, the cost of insurance for people in the second category is AED 10 per month or AED 120 per year.

-The payment government will provide payments within two weeks of the claim date and it will last three months per claim. An employee is also eligible for compensation if they did work and have a subscription to the insurance scheme for at least 12 months; so long as they have not been let go due to a disciplinary reason or because of resignation.

-However, if the person leaves the nation or accepts a new position, they are no longer eligible for compensation.

-The Insurance Pool’s website, smart app, bank ATMs, kiosks machines, business service centers, money exchange firms, Etisalat, SMS, or any other channel that MoHRE may disclose at a later time are all ways that employees can enroll in the insurance program.

-The MOHRE confirmed that the program will be obligatory for all employees and gave information on the firms providing unemployment insurance in the UAE. In accordance with the MoHRE, the Dubai Insurance Company would provide the program.

5. Summary of the UAE unemployment insurance scheme law

-Workers of the federal government and the business sector who are residents as well as nationals will enjoy the coverage of the insurance program.

-.Both private and public sector employees must contribute a monthly insurance premium to the program in order to be eligible.

– To be eligible to collect the insured amount, the person must have been under the insurance for 12 consecutive months starting on the subscription date.

– The payment will be made on a monthly basis, based on 60% of the employee’s base pay, and will not exceed AED 20,000 per month.

-Only 3 months from the time of unemployment is the sum payable.

-The unemployment insurance program will not provide benefits to investors (company owners), domestic helpers, contract or temporary employees, children under the age of 18, or pensioners receiving a pension who have joined a new job.

-If an employee is let go for disciplinary grounds in accordance with the Labour Relations Law, the Human Resources Law, and any other applicable laws, they will not obtain the insurance sum.

-If there has been fraud or dishonesty in the claim or if the stated place of employment is false, the guaranteed compensation will not be paid. There will be fines and penalties in this situation.

-The payment will stop if the person secures employment while still entitled to compensation.

-Negotiations between the policyholder and the service provider may result in additional benefits.

6. How can Connect Legal help you?

Connect Legal will help you enroll and comply with the UAE unemployment insurance scheme. We can give you the advice you need to abide by the laws when necessary. We have a wide range of lawyers, ready to help you, including:

• Corporate lawyers.
• Labour lawyers.
• Divorce lawyers.
• Immigration lawyers.
• Criminal lawyers.
• Family lawyers.

Also, you can find support in the following practice areas:

• Criminal law.
• Commercial-property.
• Divorces.
• Labor law.
• Corporate business law.
• Family law.

Do you need support with your UAE unemployment insurance scheme? Contact us now! Send us an email at [email protected]. Also, you can give us a call at +971 43 316 688. Also, you can register on our site and submit a query, we will make sure to answer rapidly!

In addition, if you need a job in the UAE, we recommend you go to thetalentpoint.com. There, you can easily find temporary or long-term vacancies that can adjust to your qualifications. Send us your resume to [email protected].