The UAE has implemented a new measure called the Involuntary Loss of Employment (ILOE) scheme, which aims to assist individuals who have lost their jobs due to reasons other than disciplinary action or resignation. To ensure maximum benefits and timely claim filing, it is crucial for employees in the UAE to subscribe to this scheme at the earliest opportunity.

Starting from January 1, 2023, the ILOE scheme became mandatory for employees working in the private sector and federal government. By subscribing to the scheme, individuals can avail themselves of its benefits until they secure new employment.

Duration and Penalties for Non-Compliance

Employees in the UAE have the option to subscribe to the insurance scheme for either one or two years. However, failure to register before June 30, 2023, will result in a penalty of Dh400 for the employee.

According to Dana Kansou, manager of strategic partnerships at Dubai Insurance, individuals must subscribe to the ILOE scheme for a minimum of 12 consecutive months to become eligible for filing a claim. Only after completing 12 months of subscription can employees receive cash benefits for a maximum duration of three months.

Advantages of Early Subscription

Dana Kansou emphasizes the importance of subscribing to the scheme as soon as possible. She explains that if an employee loses their job on January 15, 2024, but purchases the policy on January 20, 2023, they will not be able to file a claim. However, by subscribing before losing their job, individuals can start the countdown of the 12 consecutive months required for claim eligibility.

Compensation Details and Subscription Plans

Under the ILOE scheme, eligible employees will receive a monthly cash benefit of up to 60% of their average basic salaries for the six months prior to the loss of employment. The scheme offers two subscription plans based on salary categories. Category A, applicable to employees with a basic salary of Dh16,000 or below, requires a monthly payment of Dh5 plus VAT (or Dh60 plus VAT for a year) for a maximum compensation of Dh10,000 per month for three months. Category B, targeting workers earning over Dh16,000, mandates a monthly payment of Dh10 plus VAT (Dh120 plus VAT for a year) for a maximum compensation of Dh20,000 per month for three months.

Legal Residency Requirement and Compensation Limit

To be eligible for the ILOE scheme, employees must hold legal residency in the UAE. Additionally, individuals can claim compensation for a total of 12 months throughout their working life in the UAE. However, if they secure new employment within the three-month period of eligible compensation, the benefits under the scheme will cease.