The Minister of Human Resources and Emiratisation has recently announced a new scheme that allows both private and public sector workers to enjoy unemployment insurance. The scheme will be applicable from next year and will be mandatory for all eligible workers in the UAE. The decision was made after a cabinet meeting on Monday, May 10 2022. Let’s cover all the important details you must know about this upcoming mandatory scheme in the UAE as an employed individual in the country.
The UAE unemployment insurance scheme also referred to as job loss insurance, this type of insurance plan that provides a certain sum of money as compensation if the insured individual loses their job involuntarily. The compensation is provided for a set period until the insured person looks for another job in the country. As per the recently introduced UAE unemployment insurance scheme, insured individuals will receive 60% of their basic salary as compensation from the insurance company after job loss. It is now a mandatory insurance plan for all the eligible private and public sector workers in the country; applicable from next year.
As explained by Abdul Rahman Al Awar, the Minister of Human Resources and Emiratisation, the UAE unemployment insurance scheme has been introduced to ensure stability for working professionals in the emirates. It also aims to maintain the competitiveness of the private and public job sectors in the UAE. The United Arab Emirates is viewed as one of the countries with the most favourable working conditions in the world. The UAE unemployment insurance scheme aims to further enhance this highly-preferred working environment.
According to the Ministry of Human Resources and Emiratisation, both UAE nationals and residents working in public or private sectors are eligible to get job loss insurance under the scheme. Anyone working on a professional designation with a permanent job is to be included in the UAE unemployment insurance scheme.
A few working individuals in the UAE will not be eligible for job loss insurance scheme. This includes domestic workers, investors in the UAE, people working on a contractual basis and any working professional younger than 18 years of age who are exempt from UAE unemployment insurance scheme. Additionally, people who have retired with a pension but have joined a new job after retirement are also not eligible for this job loss insurance scheme.
As evident by now, there are several benefits of unemployment insurance scheme that you can hope to enjoy as a professional worker in the UAE. Let’s cover the top ones in brief:
While in the UAE unemployment insurance scheme, the expected yearly premium and the eligible individuals are finalized as of now, a few details are still in the grey. For example, the government is yet to decide the minimum period of compensation after the insured individual has lost their job. Apart from that, a few other finer details related to the scheme may come to light later this year as the ministry finalises the framework.
Ans: The Minister of Human Resources and Emiratisation is expecting the mandatory job loss insurance to cost somewhere between AED 40 to AED 100 per year. The premium of these plans is to be submitted yearly to the insurance provider that the individual has chosen.