UAE has announced an unemployment insurance scheme for the residents and Emiratis to have a stable life even after the termination. The UAE unemployment insurance scheme is mandatory now for all workers in the UAE from January 1, 2023.
This new unemployment insurance is mandatory for every worker in the country but costs only a nominal fee. From the 1st of January 2023, the private sector and federal government workers are compelled to apply for the UAE unemployment insurance scheme. It is part of the Ministry of Human Resources and Emiratisation (MOHRE)’s social security policy.
The unemployment insurance scheme established a fund into which the employees in both public and private sectors ought to pay a nominal premium during their phase of employment. This premium is a kind of security that gives a guarantee of unemployment benefits in the case of job loss.
The Scope Of The UAE Unemployment Insurance Scheme
The scheme applies to all employees in the federal and private sectors except:
- Domestic workers.
- Business owners who handle and manage their business themselves.
- Juveniles under the age of 18.
- Employees on a temporary basis.
- Workers who are already retired receive pensions.
- Those retirees who have joined a new employer.
Limitations To The Unemployment Insurance Scheme
This scheme is limited to employees who are terminated but not because of disciplinary reasons. There will be penalties as well if the employee fails to subscribe.
Those workers who fail to subscribe to the scheme will be disqualified to claim the benefits. If the employee fails to pay the premiums during his employment period or non-compliance will result in fines of:
- AED 200 for being unable to pay the premium for more than 3 months.
- AED 400 for failure to subscribe to the scheme.
These penalties can be deducted by the authorities via various means, for instance, from salary accounts, or end-of-services benefits.
- Employees must check if the conditions are meeting to claim insurance benefits:
- Evidence of unemployment must be provided.
- Insurance premiums should be paid for 12 months.
- Those employees who are dismissed for disciplinary reasons cannot claim the unemployment insurance scheme.
- The employee must have a legal residence in the country.
- Employees must submit a claim within thirty days of termination from the job.
- The claim must be correct rather than deceitful or fraudulent.
People who are living in the UAE cannot escape from this unemployment insurance scheme because it is a mandatory requirement. This is the most recent step taken in the UAE to ensure the well-being and financial stability of individuals employed in the country.
Over 60,000 people have already signed up for this insurance scheme and proved to be a good initiative.
Unemployment Insurance Scheme Criteria
The insurance scheme is divided into two categories. The first category applies to those earning less than AED 16,00 per month and the second is to those who are earning more than AED 16,000 per month. The monthly premium for the first category is AED 5 or AED 60 annually. In the second case, the insurance premium is AED 10 per month or AED 120 per year.
The monthly compensation will not be more than AED 10,000 for the first category and AED 20,000 for the second category. However, if the insured employee has left the country, he is not eligible for the payment. If the employee has started a new job, then he is also not eligible for this scheme.
The compensation will be given out within two weeks after the claim date and will not exceed three months per claim. It is important to have enough information about the UAE unemployment insurance scheme and avail the opportunity.
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