The Unemployment Insurance scheme provides financial support to employees when losing their jobs.
How does Unemployment Insurance work?
Employees pay a fee to subscribe to the Unemployment Insurance scheme. If they lose their job at least 12 months after the start of their insurance subscription, they will receive 60% of their basic salary for up to three months.
Benefits are calculated based on their average 6-month basic salary preceding unemployment.
Who is eligible for unemployment insurance?
Emiratis and residents who work in private and government sectors.
Employees are not eligible if they are:
- Business owners who own and manage their businesses
- Household workers
- Temporary employees
- Less than 18 years old
- Retired and get pensions
What is the cost of a subscription?
Employees earning a basic salary of less than AED 16,000 pay AED 5 plus VAT monthly or AED 60 plus VAT yearly.
Employees earning a basic salary of more than 16,000 AED pay AED 10 plus VAT monthly or AED 120 plus VAT yearly.
Employees can pay their insurance fees monthly (12 payments per year), quarterly (4 payments per year), half-yearly (2 payments per year), or yearly (1 payment per year).
Where to apply for unemployment insurance?
C3Pay users can subscribe to the Unemployment Insurance via their C3Pay app with just a few taps.
To make the subscription easier and help employees avoid fines, Edenred clients can subscribe all their employees in bulk to the scheme, through the Edenred payroll portal.
Currently, Edenred is the only provider in the UAE offering easy bulk subscriptions.
Other employees can subscribe via:
- Dubai Insurance website (www.iloe.ae)
- ILOE mobile app
- Exchange Centers
- Telecommunications bills
- Bank mobile apps
- Business centres
From when is it applicable?
Employees must subscribe to the insurance from January 1st, 2023.
How to submit a compensation claim?
Employees have 30 days from the date of unemployment to submit their claim and will receive the compensation from the insurance within two weeks.
Employees will get paid for three months or until they find a job, whichever comes first.
Who is eligible for a compensation claim?
Employees who paid the insurance subscription for 12 months and be legally present in the UAE are eligible for compensation.
Employees will not receive compensation if:
- The employee got fired for disciplinary reasons under the UAE’s Labor Law in the private sector (Federal Decree-Law No. 33 of 2021), the Human Resources Law in the federal government, and any other applicable laws.
- The employee resigned.
- The claim involves fraud or deception.
- The establishment where they work is fictional.
What happens if an eligible employee does not subscribe to Unemployment Insurance?
- Never subscribed
From July 1st, 2023, employees will pay a fine of AED 400.
- Subscribed but stopped paying for at least 3 consecutive months
Employees will be disqualified from receiving unemployment benefits. They will have to resubscribe by purchasing a new policy, pay all missed amounts and pay a fine of AED 200.
Who provides the Unemployment Insurance?
The Involuntary Loss of Employment (ILOE) scheme is offered by the ILOE Insurance Pool represented by Dubai Insurance.
Policy issuance, claims evaluations or paying the claims is the insurance company’s responsibility, while Edenred, through C3Pay, serves as a payment channel for the insurance subscription.