UAE's Employment Loss Insurance Scheme Draws More Than 60,000 Subscribers

More than 60,000 workers in the UAE have signed up for the Involuntary Loss of Employment Insurance Scheme in its first two days of operation.

The Ministry of Human Resources and Emiratization, which inked an agreement with nine local insurance companies to operate and fund the scheme, said 96 percent of the participants chose to subscribe to the social security program annually.

Initially announced in May 2022, the program aims to give Emiratis and residents in the public and private sectors access to a cash sum for three months if they lose their jobs. The scheme seeks to provide a decent life to people until they find another job. The scheme, which exempts employees working in the free zones, allows workers to subscribe to it in several ways and terms.

Subscribers may sign up for the insurance program through the insurance pool's website or its smart application, ATMs, money-changing companies, business service centers, kiosk machines, and du and Etisalat. They may also choose to subscribe directly to an insurance company.

The Involuntary Loss of Employment Insurance Scheme was implemented through Federal Decree No. 13 of 2022, which relates to unemployment insurance that does not incur any additional costs for employers. The insurance program covers two categories of workers— those whose basic wage is Dh 16,000 or less and those with a basic wage of more than Dh 16,000.

Workers have the option of paying monthly or annually and the cost depends on their income category. Those belonging to the first category may pay annually for Dh5 per month or Dh60 annually, while those in the second category may pay Dh10 per month or Dh120 annually.

Under the scheme, workers who lost their jobs will be compensated for a maximum of three months from the date of their job loss. The compensation is calculated at 60 percent of their basic salary over the most recent six months before the employment loss, for a maximum payment of Dh 20,000 per month.

Workers can only be eligible for the jobless payment if they have worked and subscribed for at least 12 months to the insurance program, as long as they have not been fired for disciplinary reasons.