The Ministry of Human Resources and Emiratisation (MoHRE) has signed an agreement with 9 local insurers to implement the new unemployment insurance scheme [4].
The scheme, which came into force 1 January 2023, aims at compensating both public and private sector employees who lose their jobs due to involuntary reasons.
The insurance scheme is divided into two categories:
- The first covers people with a basic salary of up to 16 000 AED (4 355.2 USD) per month. The insurance premium is set at 5 AED (1.4 USD) per month or 60 AED (16.3 USD) per year.
- The second category is for those whose basic monthly earnings exceed 16 000 AED (4 355.2 USD).
- The premium for this group is set at 10 AED (2.7 USD) per month or 120 AED (32.6 USD) per year.
The employee can pay the premium on a monthly, quarterly, semi-annual or annual basis. The premium amount is subject to value added tax (VAT).
The monthly compensation or unemployment benefit is calculated at the rate of 60% of the basic salary for a maximum of three months from the date of unemployment.
Enrolment in the UAE unemployment insurance scheme is mandatory for both national and expatriate employees in the public and private sectors. However, it is still optional for employees in free-trade zones.
The following are not eligible for this coverage: investors, owners of establishments in which they work, domestic helpers, employees under temporary employment contracts, minors under 18 years of age, retirees who receive a pension and have taken up a new job.
It is worth noting that the unemployment insurance scheme has registered over 6.5 million members as at 1 October 2023.
List of insurance companies offering unemployment insurance in the United Arab Emirates
- Abu Dhabi National Insurance Company (ADNIC)
- Abu Dhabi National Takaful Company
- Al Ain Ahlia Insurance Company
- Dubai Insurance Company
- Emirates Insurance Company (Eminsco)
- National General Insurance Company
- Oman Insurance Company
- Orient Insurance Company
- Orient UNB Takaful Company