unemployment insurance scheme to start from 01st January 2023

The new programme comes into effect from 01st January 2023

The private sector and Federal government employees must sign up to the new unemployment insurance scheme starting 01st January 2023.

The Ministry of Human Resource and Emiratization signed an agreement with nine local insurance companies to set up the framework for unemployment insurance scheme.

The programme is divided into two categories

The first will cover employees who earn a basic salary of AED 16,000/- or less per month.
The second is for workers earning a monthly basic salary of AED 16,000/- or more.

Insurance cost for employees in the first category is set for AED 5/- per month or AED 60/- annually. Individuals earning the higher basic salary will pay AED 10/- per month or AED 120/- annually.

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

The new unemployment insurance scheme is an essential part of the legislative and legal structure to meet the requirements of the national economy.

The aim of the new system is to provide a social security programme that ensures the sustainability of a decent life for Emiratis and resident employees during their unemployment period and will reduce business risks.

This will create a safety net that supports employees in their career paths and ensure their livelihood.

Insured employees who lose their job must submit their claim through three approved claim channels.

The insurance pool’s e-portal
Smart application
Call centre within 30 days of unemployment.

Compensation will be paid within two weeks from the date of the claim and capped at maximum of three months per claim.

Employees are eligible for the jobless payment if they have worked and subscribed for at least 12 months. They have to ensure they haven’t been dismissed for any disciplinary reason 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.