Living and working in Dubai comes with its own unique set of opportunities and challenges. You might find yourself out of a job due to reasons beyond your control. But there’s a safety net to help you during such challenging times. The UAE Government introduced the Involuntary Loss of Employment (ILOE) Insurance Scheme to help you manage your finances if you lose your job.
In this article, we’ll guide you through the basics of ILOE insurance, its key features, payment options, and how to apply. So, if you’re working in Dubai or planning to, keep reading to see how this insurance can give you a sense of security in the unpredictable world of employment.
What is ILOE Insurance In The UAE?
Involuntary Loss of Employment (ILOE) Insurance is a scheme the UAE Government has introduced to give temporary financial assistance to employees who have become unemployed for reasons they couldn’t control like being let go by their employers. This scheme doesn’t cover job losses due to disciplinary action or resignation. It’s a must-have for all eligible employees in the UAE’s private and federal government sectors, including Dubai.
The ILOE insurance scheme provides a safety net for workers, giving them financial support during the tough time of job loss until they find new employment. The UAE Government has made it easy for you to subscribe to this insurance scheme through various channels, including the ILOE Portal, the official ILOE App, Exchange Centers, Tawjeeh & Tasheel Business Centers, and more.
The Basics of How ILOE Insurance Works
The ILOE insurance scheme works on a simple principle: you pay a monthly premium, and in return, you get financial support if you lose your job for reasons other than resignation or disciplinary action. The insurance premium amount depends on your primary salary, and two categories of plans are currently on offer.
If you’re earning a basic salary equal to or below AED 16,000, the monthly benefit is 60% of the average basic annual wage over the most recent six months before the involuntary loss of employment.
The maximum claim benefit for this category is AED 10,000 monthly for up to three consecutive months per claim.
For those earning a basic salary above AED 16,000, the monthly benefit is also 60% of the average basic salary over the most recent six months before the involuntary loss of employment. However, the maximum claim benefit for this category is AED 20,000 per month for up to 3 consecutive months per claim.
To be eligible for compensation, you must have subscribed to the scheme for at least twelve months (consecutively) and paid all insurance premiums on time. Claims must be submitted within a 30-day bracket from the date of termination. These claims may be made through the ILOE portal, mobile app, ILOE call centre, or any other specified channels by MOHRE in coordination with the Insurance Pool.
You must meet certain conditions to be eligible for the insurance coverage. You must prove that your unemployment wasn’t due to resignation and that you weren’t dismissed for disciplinary reasons. You mustn’t have an existing abscondment complaint, and the claim mustn’t be made through fraud or deception. The loss of work shouldn’t result from non-peaceful labour strikes or stoppages, and you must be legally present in the United Arab Emirates.
You must register for the insurance scheme or be updated on payments for over three months to avoid facing monetary fines issued by the UAE Ministry of Human Resources & Emiratisation (MOHRE). Individuals who fail to subscribe to the insurance within the grace period will be subject to a fine of AED 400 and a fine of AED 200 if the insured fails to pay insurance premiums for more than three months.
The ILOE insurance scheme is available for a policy period of 1 year or 2 years, and insurance premiums can be paid monthly, quarterly, semi-annually, annually, or in total (2 years). You must comply with the payment of insurance premiums according to the chosen payment plan, and failure to do so may result in policy cancellation and fines.
For more information about the ILOE insurance scheme, visit the official ILOE website or contact the ILOE insurance pool.
Key Features of ILOE Insurance In The UAE
The ILOE insurance scheme in Dubai is a distinctive initiative that offers financial protection to employees who’ve lost their jobs due to unforeseen circumstances such as redundancy or company closure.
Coverage Details
The ILOE insurance scheme extends its coverage to a broad spectrum of individuals. This includes Emiratis, residents working in the federal government and private sectors, investors, domestic helpers, temporary contract workers, juveniles under 18, and retirees entitled to a pension and have joined a new job.
Policy Limits and Deductibles
The ILOE insurance scheme has two categories for the maximum claim benefits. The aggregate claim payment over the entire work life of the insured in the UAE should be at most 12 monthly benefits.
The employee’s basic salary determines the insurance premium.
For basic salaries of AED 16,000 or below, the rate is AED 5 + VAT per month; for basic annual wages above AED 16,000, the rate is AED 10 + VAT per month.
The total VAT amount is added to the first instalment/payment.
Unique Advantages of ILOE Insurance
The ILOE insurance scheme stands out for its accessibility. You can subscribe to the scheme through various channels, including SMS and telecommunication bills, kiosks, bank apps and ATMs.
Another advantage is the protection it offers to employees. The scheme aims to provide a certain degree of protection for individuals in the private and federal government sectors by compensating them for a limited duration in case of job loss.
Finally, the ILOE insurance scheme is mandatory for all private and federal government sector employees, ensuring all eligible employees have access to this financial safety net. The UAE government has extended the deadline for subscribing to the ILOE scheme, with new fines for non-subscribers having started from October 1 2023.
What Are The Payment Options For ILOE Insurance In The UAE?
The ILOE insurance scheme, initiated on January 1, 2023, offers a range of payment options to suit different financial situations and preferences. You can pay your premiums monthly, quarterly, or semi-annually, or even make an annual or full payment.
There are numerous methods to settle ILOE insurance instalments. Payments can be made through the ILOE portal or the ILOE mobile app. Alternatively, you can contact the official call centre. Other methods include exchange centres, business centres, SMS and telecommunication bills, kiosks, bank apps, and ATMs.
Suppose you’re considering subscribing to ILOE insurance. In that case, you can do it online or in person through various platforms in the UAE. The ILOE portal and mobile application, managed by Dubai Insurance, allow employees to enrol in the unemployment insurance plan free of charge. Private entities such as Al Ansari Exchange, MBME Pay, uPay, and C3Pay have partnered with Dubai Insurance to offer the service of signing up for ILOE, but additional service charges may apply.
Be aware that the insurance certificate will be cancelled unless the instalments for ILOE insurance are settled for a period exceeding three months from the due date. Therefore, it’s crucial to maintain regular payments to ensure your coverage.
The ILOE insurance scheme is designed to offer a layer of protection for individuals in the event of job loss and to enhance the competitiveness of Emirati cadres in the job market. It’s a valuable safeguard that can provide financial stability during unpredictable times.
How to apply for an ILOE Insurance
Application Process Overview
The process of applying for the ILOE Insurance Scheme is straightforward and user-friendly. The UAE Government has ensured you can easily subscribe to the scheme through various channels.
In the unfortunate event of involuntary job loss, you can claim compensation under the insurance scheme. You must submit your claim within 30 days from your termination date through approved claim channels to do this. You’ll need to provide documents such as the dismissal document and a copy of the final judicial ruling in the event of a labour lawsuit.
Possible Eligibility Requirements
Specific categories of workers are excluded from subscribing to the ILOE Insurance Scheme. These include investors, domestic helpers, temporary contract workers, individuals under 18, and retirees entitled to a pension and joining a new job.
To be eligible for the scheme, you must have paid your contributions for at least 12 consecutive months. If you meet this requirement, you’ll be entitled to claim cash benefits for up to 3 consecutive months per claim if you lose your job involuntarily.
It’s also worth noting that employers aren’t required to register their employees in an insurance scheme or pay any contributions to the scheme—the responsibility to subscribe and maintain payments lies solely with you, the employee.
ILOE Insurance FAQs
Who is exempt from ILOE insurance in the UAE?
While the ILOE scheme is designed to offer financial protection to most employees in the UAE, certain categories of workers are not required to subscribe. These include investors, business owners, domestic workers, temporary contract workers, individuals under 18, and retirees receiving a pension and taking up a new job.
Is ILOE mandatory in UAE?
Indeed, the ILOE scheme is obligatory for most employees in the UAE, including those in the private sector, the federal government, and free zones. It’s important to remember that the onus is on you, the individual employee, to register and pay the premiums. Non-compliance could result in fines.
Who has to pay for ILOE insurance in the UAE?
The onus is on you as an employee to subscribe to the ILOE scheme and pay the premiums. Your basic salary determines the monthly premium. You have the flexibility to pay the premium on a monthly, quarterly, half-yearly, or annual basis.
Securing Your Future with ILOE Insurance
In these unpredictable times, ILOE insurance is a lifesaver for Emiratis and Dubai residents. It provides a financial cushion, ensuring that you’re not left high and dry if you lose your job. This mandatory safety net protects against unexpected job loss, helping you maintain financial stability during tough times.
To fully benefit from the scheme, keeping up with your payments and knowing the conditions to claim your benefits is essential. You can confidently navigate your professional journey, knowing the ILOE Insurance scheme has your back. You can rest easy, knowing that this scheme is a great investment towards your peace of mind in uncertain times.