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UAE calls on workers to register in unemployment insurance scheme

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The insurance programme compensates the insured employee for a maximum period of three months from the date of their unemployment

The number of subscribers to the UAE’s unemployment insurance scheme has reached more than 250,000 since the start of registration on January 1, 2023, state-owned WAM news agency reported.

The scheme aims to secure a temporary income for insured employees at a low premium, should they lose their job and until they are able to find alternative employment.

Khalil Khoury, under-secretary for human resources affairs at the Ministry of Human Resources Affairs, called on all workers to register for the scheme.

The insurance pool, represented by Dubai Insurance Company, provides eight channels for registration and subscription to the scheme.

To date, about 88 percent of the subscribers preferred to subscribe through the website, while eight percent have used the smart application. Four percent subscribed through other channels.

The unemployment insurance scheme includes two categories. The first is for workers with a basic salary of AED16,000 ($4,356.35) or less, which attracts an insurance premium of AED5 per month. The maximum monthly compensation for this category is AED10,000.

The second category covers those with a basic salary of AED16,000 or more. It carries a AED10 per month premium and the maximum monthly compensation is AED 20,000, the report said.

Employees can choose to pay the premium monthly, quarterly, once every six months or annually. Around 86 percent of subscribers have chosen an annual payment of the premium while six percent have elected to pay once every six months.

About four percent of the subscribers have chosen the quarterly payment, and the remaining four percent preferred the monthly payment option.

The insurance programme, which is valid for a period of 12 consecutive months from the date of registration, compensates insured employees for a maximum period of three months from the date of their unemployment, provided they did not resign from the job or are dismissed on disciplinary grounds.

Compensation is calculated at 60 percent of basic salary in the last six months prior to unemployment and should be paid within two weeks from the date the claim is submitted.

The scheme covers workers in the federal government sector and the private sector, although is not applicable to those working in a freezone.

Further exempted categories include investors or owners of establishments, domestic workers, temporary contract workers, juveniles under 18 years, and retirees who receive a pension and or have joined a new job.

“For Western countries, research has shown that unemployment insurance has brought about stability and evaded poverty for many margins of society. This approach will help the UAE immensely in achieving a more holistic, stable workspace,” Helen Barrett, deputy chair of the British Business Group and a partner at CBD Corporate Services, previously told AGBI.

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