HomeUAEUAE launches private sector unemployment insurance in 2023

UAE launches private sector unemployment insurance in 2023


ABU DHABI, 3 November – The UAE has launched a new insurance scheme that aims to provide protection for employees in the private sector and the UAE’s federal government.

Under the new scheme, which was originally announced in May, will provide employees with a cash compensation for a limited period not exceeding three months for each claim in the event of job termination for reasons beyond their control, the Emirates News Agency (WAM) reported on Tuesday.

The new scheme was signed by the Ministry of Human Resources and Emiratisation (MoHRE) with a group of nine local insurance companies, to launch the framework of the new Unemployment Insurance Scheme, in line with the Federal Decree Law No. 13 of 2022 and the relevant Cabinet Resolutions.

According to WAM, the insurance scheme is divided into two categories – the first covering those with a basic salary of AED16,000 and less. The insurance cost for the insured employee in this category is set at AED 5 per month, which is AED 60 annually.

The second category includes those with a basic salary exceeding AED16,000, and the insurance cost is AED 10 per month, which is AED 120 annually.

Employees working on a commission basis can also subscribe to the scheme.

“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),” WAM said.

“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 endeavours to be the next capital of the future, and a global incubator for talent and companies and investments, which can be achieved through economic and social development and the empowerment of human capital,” the UAE Minister of Human Resources and Emiratisation Dr. Abdulrahman Al Awar said.

Cash compensation

Under the new scheme, the value of the monthly compensation will not exceed AED 10,000 and AED 20,000 for the first and second category, respectively.

“The insurance coverage compensation is calculated on a monthly basis at the rate of 60 percent of the basic salary and for a maximum of three months for each claim from the date of unemployment,” WAM said.

Additionally, the employee must submit the claim through the three approved claim channels, which are the insurance pool’s e-portal, the insurance pool’s smart application, and the insurance pool’s call centre.

The claim must be submitted within 30 days from the date of unemployment.

The compensation will be paid within two weeks from the date of the claim and capped at a maximum of three months per claim, WAM said adding that the compensation for an employee is eligible “if they have worked and subscribed for at least 12 months to the insurance scheme as long as they have not been dismissed for a disciplinary reason or because of resignation.”

The employee, however, is not eligible for a compensation if they have left the country or if they have moved on to a new job.

According to WAM, employees can subscribe to the insurance scheme via the Insurance Pool’s website, smart application, bank ATMs, kiosk machines, business service centres, money exchange companies, du and Etisalat, SMS, or any other channel, which MoHRE may announce at a later date.


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