How to Claim ILOE Insurance After Termination of Employment in UAE?

Author: Awatif Mohammad Shoqi Advocates & Legal Consultancy
Introduction:

In accordance with Federal Decree-Law No. 13/2022, which establishes the Unemployment Insurance Scheme (UIS) in the UAE, individuals can claim Insurance for Loss of Employment (ILOE) to navigate post-termination situations.

The UIS aims to provide financial support to employees facing unemployment, ensuring their stability during transitional phases in their careers.

Here’s a comprehensive guide on how to claim ILOE insurance after termination:

  1. Understand Eligibility Criteria (Article 5 of Federal Decree-Law No. 13/2022): Before proceeding with a claim, ensure that you meet the eligibility criteria outlined in the decree-law. This includes being a subscriber to the UIS for a consecutive period of at least 12 months, not being dismissed for disciplinary reasons, and not making fraudulent claims.
  1. Review Compensation Details (Article 6 of Federal Decree-Law No. 13/2022): Familiarize yourself with the compensation structure specified in the decree-law. ILOE compensation is typically equivalent to 60% of the contribution salary, with a maximum cap per month (currently AED 20,000). The duration of compensation is limited to 3 months from the date of unemployment, with a maximum coverage period of 12 months during your tenure in the UAE labour market.
  1. Choose Additional Benefits (Article 11 of Cabinet Decision No. 97/2022): While the basic compensation is provided under the UIS, subscribers have the option to negotiate additional benefits with the service provider. Consider your specific needs and preferences to decide whether additional coverage is necessary.
  1. Submitting a Claim (Article 12 of Cabinet Decision No. 97/2022): Upon termination of employment, submit your claim for ILOE compensation within 30 days. Ensure accuracy and completeness of all required documents, adhering to the claim submission process specified by the Ministry of Human Resources and Emiratisation (MoHRE).
  1. Verification and Approval (Article 13 of Cabinet Decision No. 97/2022): After receiving your claim, the service provider may verify the provided information and documentation. If everything meets the eligibility criteria, your claim may be approved within a reasonable timeframe, typically not exceeding 2 weeks from the date of submission.
  1. Receiving Compensation (Article 13 of Cabinet Decision No. 97/2022): Once your claim is approved, the service provider will disburse the compensation to your designated account. You may have the right to choose the account where the compensation will be transferred.
Penalty and Fine for Non-Compliance:

Failure to adhere to the regulations outlined in the Unemployment Insurance Scheme (UIS) may result in financial penalties as per Ministerial Decision No. 604/2022, Amended by Ministerial Decision No. 340/2023. These penalties include:

  • Subscription Delay: A fine of AED 400 is imposed on workers/employees who fail to subscribe within the specified timeframe, as prescribed in Article No. (11) of Ministerial Decision No. 604/2022.
  • Premium Payment Default: If insurance premiums are not paid for over 3 months, the Insurance Certificate may be revoked, accompanied by a fine of AED 200.
  • Deduction from Wages: Unpaid fines for over 3 months may be deducted from wages via the Wage Protection System or other authorized methods.
  • Payment Options: Insured individuals may have the option to pay fines in instalments or apply for exemption, subject to procedures outlined in the accompanying manual.
Conclusion:

By following these steps and understanding the provisions outlined in Federal Decree-Law No. 13/2022 and Cabinet Decision No. 97/2022, individuals can effectively navigate the process of claiming ILOE insurance after termination, ensuring financial stability during transitional periods in their careers.