Federal Decree-Law No. 13/2022 implemented the unemployment insurance scheme in the UAE, whereby every employee can claim insurance for loss of employment to deal with post-termination situations. This insurance scheme is intended to offer financial assistance to support employees in case of unemployment or specific career transitions. Here’s how to claim ILOE insurance subsequent to termination:
The eligibility criteria are outlined in Article 5 of the unemployment insurance law. This article states that before filing a claim, individuals must ensure that the decree-law’s eligibility requirements are fulfilled. This includes being a UIS subscriber for no less than 12 months, not being dismissed for disciplinary reasons, and not submitting fraudulent claims.
Understand the compensation system that is outlined in the aforementioned decree-law, as stated in Article 6. In most cases, the ILOE compensation is equal to sixty percent of the contribution salary, with a maximum cap per month of twenty thousand UAE Dirhams. The period of compensation will be limited, beginning from the date of unemployment, for a maximum of three months, with a total of twelve months during the period you are working in the UAE.
Additionally, Cabinet Decision No. 97 of 2022 was published by the government in order to regulate and coordinate the implementation of the unemployment insurance program. Article 11 of the same cabinet decision, which addresses the extra benefits, states that subscribers can negotiate with their service provider for additional benefits while taking their individual needs and preferences into account. Moreover, Article 12 states that, within the first thirty days after the termination of employment, the claim for ILOE compensation must be submitted. The process of submission outlined by the Ministry of Human Resources and Environment must be followed, and all necessary documents must be properly completed.
Furthermore, Article 12 of the cabinet decision mentions the claim, stating that, in the event of termination of employment, individuals must submit a claim for ILOE compensation within 30 days and ensure the accuracy and completeness of all necessary documents, adhering to the claim submission process specified by the Ministry of Human Resources and Emiratisation (MoHRE).
Following receipt of the claim, the service provider may verify additional information and documents. If all of the provided information and documents meet the criteria, the claim may be approved within a reasonable time frame, typically no more than two weeks from the date of submission, as specified in Article 13 of Cabinet Decision No. (97) of 2022. Upon claim approval, the service provider may disburse compensation into an account registered in the applicant’s name, in accordance with Article 13 of the cabinet decision. The applicant may choose the account to which the compensation will be transferred.
The Legal Consequence for Noncompliance: Non-compliance with the provisions of the unemployment insurance scheme shall be subject to financial penalties in accordance with Ministerial Decision No. 604/2022 and amended by Ministerial Decision No. 340/2023 as follows:
A fine of AED 400 will be imposed on workers/employees who fail to subscribe within the specified timeframe, according to Article 11 of Ministerial Decision No. (604) of 2022.The insurance certificate may be cancelled, and a fine of AED 200 may be imposed in the event of non-payment of insurance premiums for a period exceeding 3 months. Further, it is possible to deduct fines from insured individuals who have been unpaid for more than three months from an individual’s salary through the use of the wage protection system or other methods that have been approved by the relevant authority. Following the procedures outlined in the related manual, insured individuals may be able to seek exemption from fines or be allowed to make the payment of fines through installments.
Therefore, according to the aforementioned Federal Law and related Cabinet Decisions, individuals can comply with all necessary procedures to effectively claim ILOE insurance upon the termination of their employment. This guarantees their financial stability during transitional periods in their careers.
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