The ILOE (Involuntary Loss of Employment) insurance in the UAE, introduced under Federal Decree Law No. 13 of 2022, serves as an essential financial safeguard for employees. This scheme supports individuals who unexpectedly lose their jobs due to reasons such as redundancy.
Subscribing to the ILOE insurance scheme is mandatory for both UAE nationals and expatriates across various sectors. It offers benefits calculated based on a percentage of the employee’s average basic salary during periods of unemployment.
We are here to guide you through the basics of ILOE insurance, detailing what it will cover, how to subscribe, how much it costs, and the claim process. This comprehensive overview aims to help you understand the ILOE insurance program and how to remain eligible for claims in the event you face brief unemployment.
What Is ILOE Insurance in the UAE?
In the United Arab Emirates, Involuntary Loss of Employment (ILOE) insurance serves as a financial safeguard for Emirati nationals and expatriate resident employees working in the federal government or in private sector roles who unexpectedly lose their jobs for reasons such as redundancy, excluding cases of voluntary resignation, disciplinary action, or dismissal. As of January 1, 2023, all government and private sector employees must subscribe to the unemployment insurance scheme. This is mandated by Federal Decree-Law No. 13 of 2022 and requires purchasing an insurance policy.
This insurance offers a monthly cash benefit (for up to 3 consecutive months), which can be up to 60% of your average basic salary calculated over the six months before unemployment. To be eligible for this compensation, you must contribute to the insurance pool with monthly premiums for at least 12 consecutive months.
Dubai Insurance Company acts as the representative for the insurance pool, which may include several insurance companies that have pooled their resources to provide unemployment insurance. This pooling helps distribute the risks and responsibilities among multiple insurers.
How to Subscribe to ILOE Insurance
Subscribing to the ILOE (Involuntary Loss of Employment) insurance is a straightforward process, mandated by Federal Decree-Law No. 13 of 2022. Here’s how employees in the UAE can ensure they are covered:
1. Determine Your Eligibility:
First, ensure you are not part of the excluded categories (e.g., investors, domestic workers, juveniles under the age of 18).
2. Choose Your Insurance Category:
Category A: For employees earning up to AED 16,000, with a monthly premium of AED 5 plus VAT.
Category B: For employees earning above AED 16,000, with a monthly premium of AED 10 plus VAT.
Please note that you have the option to negotiate additional benefits with the service provider, as per Article 11 of Cabinet Decision No. 97/2022.
3. Enrolment Options:
- Direct Enrolment: Visit the ILOE portal or download the mobile app (click the link for Apple users here and click the link for Google Play users here). Register using your Emirates ID and contact details, and follow the prompts to enrol.
- Through Service Providers: You can also subscribe to ILOE insurance through various other providers (see below under the heading ‘All Subscription Options for ILOE Insurance’).
4. Payment of Premiums:
Decide on the frequency of your premium payments—monthly, quarterly, semi-annually, or annually. You can choose between one or two-year policy periods, with the total VAT included in the first payment. Payment can be made through the ILOE portal, mobile app, or at any service centre that facilitates these transactions.
5. Obtain Your Certificate of Insurance:
Once enrolled, you will receive a Certificate of Insurance. This can be downloaded from the ILOE portal or app and serves as proof of your subscription (detailed instructions below).
6. Maintain Your Subscription:
To remain eligible for the benefits, ensure your premiums are paid regularly according to the chosen frequency, and keep your employment records up to date.
For detailed payment terms and conditions, visit ILOE’s official payment guidelines.
All Subscription Options for ILOE Insurance
Subscribing to the ILOE (Involuntary Loss of Employment) insurance in the UAE is accessible through a variety of channels, ensuring convenience for all users. Below are the various methods through which you can subscribe and make payments:
1. ILOE Portal:
Directly access the ILOE insurance services via the official online portal or mobile app. Click here for the ILOE mobile app for Apple and click here for the ILOE mobile app for Google Play. Here, you can avoid fees, quickly register, manage your account, and stay updated on your insurance status.
2. Mobile App:
Download the dedicated ILOE app, which allows for easy subscription, policy management, and premium payment directly from your mobile device.
3. Exchange Centres:
Available at all Al Ansari Exchange branches (over 200 locations) or via the Al Ansari Exchange App, offering easy access to subscription services across the UAE. To download the mobile app, click here for Apple users and click here for Google Play users.
4. Business Centres:
Enrol at any Tawjeeh or Tasheel branch, where you can receive face-to-face assistance and guidance through the subscription process.
5. SMS and Telecom Bills:
For Etisalat users, subscribe by sending an SMS with your Emirates ID number to 2120 (e.g., ID 784xxxxxxxxxxxx to 2120), providing a straightforward method without needing internet access.
6. Kiosks:
Use the MBME Pay kiosks available across various locations for on-the-spot enrollment. These kiosks provide an interactive way to manage your subscription details.
7. Bank Apps and ATMs:
Subscribe through the C3Pay app or via Botim available at various ATMs, integrating your banking and insurance transactions in one place.
Additional Subscription and Payment Methods:
8. Online Banking:
Many UAE banks offer the ability to subscribe to insurance schemes directly through their online banking portals, where you can manage all your financial services in one secure place.
9. Direct Debit:
Set up a direct debit from your bank account to automate premium payments, ensuring you remain compliant with the policy requirements without manual monthly reminders.
10. Mobile Wallets:
Pay your premiums conveniently using mobile wallets like Apple Pay, Google Pay, and Samsung Pay, depending on the partnerships established by the insurance providers.
11. Company Payroll Deduction:
Some employers offer the option to have insurance premiums deducted directly from your salary. This arrangement can be set up through your employer’s HR department, streamlining the payment process.
12. Insurance Brokers:
For those who prefer a more personalised service or need additional assistance, subscribing through an insurance broker can be beneficial. Brokers provide detailed advice, handle paperwork, and even negotiate terms on behalf of the employee.
What Does ILOE Insurance Cover?
Involuntary Loss of Employment (ILOE) insurance in the UAE is designed to provide financial stability during times of sudden unemployment. This essential coverage is particularly important in a dynamic job market and serves as a financial safety net for both UAE nationals and expatriate employees. Below is an overview of what ILOE insurance typically covers:
Scope of Coverage:
- Unemployment Benefits: ILOE insurance compensates the insured for loss of income due to involuntary unemployment. The primary causes covered include redundancies, layoffs, or any termination not triggered by the employee’s actions, such as voluntary resignation or dismissal for misconduct.
- Percentage of Salary: The insurance provides a monthly cash benefit that can amount to up to 60% of the employee’s average basic salary calculated over the six months prior to unemployment. This support is designed to help maintain financial stability while the individual searches for new employment.
Duration of Benefits:
- Time-Limited Support: Benefits are typically available for a maximum of three consecutive months for each claim. This period is designed to bridge the gap until the insured finds new employment or decides on their next steps.
- Lifetime Cap: The total claim payments are limited to a maximum of 12 months over an individual’s working life in the UAE. This cap ensures that the fund can support as many eligible employees as possible.
Maximum Monthly Benefits Based on Salary Categories:
- Category A: Employees earning up to AED 16,000 (USD 4,356) are eligible for Category A, which offers a maximum monthly benefit of AED 10,000 (USD 2,723).
- Category B: For employees whose basic salary is AED 16,000 (USD 4,356) or higher, Category B applies, providing up to AED 20,000 (USD 5,446) in monthly compensation.
Additional Benefits:
- Negotiable Extras: Policyholders have the option to negotiate additional benefits with their insurance provider, enhancing the basic package to better suit their specific needs and circumstances.
Exclusions:
- The ILOE scheme does not cover certain groups, including those on temporary contracts, investors, domestic workers, minors, retirees who have resumed working, and individuals terminated for misconduct, voluntary resignation, or dismissal for disciplinary reasons.
- The policy does not cover unemployment resulting from external factors like war, pollution, terrorism, government actions, or force majeure.
Premium Requirements:
- Consistent Payments: To remain eligible for benefits, policyholders must consistently pay their premiums. Non-payments beyond a three-month grace period can lead to policy cancellation and an AED 200 fine.
Eligibility Criteria:
- Minimum Subscription Period: Employees must have paid into the scheme for at least 12 consecutive months before they can make a claim. This requirement ensures that benefits are reserved for those who have contributed to the insurance pool.
Legal Residency Requirement:
- Residency Status: Claimants must legally reside in the UAE at the time of claiming the benefits, ensuring that support is provided to those who are part of the UAE workforce.
Please note the insurer’s responsibility ceases upon the insured reaching the aggregate limit of benefits or in the event of their death. Those with an absconding complaint are exempt from premium payments as per ministerial rulings.
How Do I Get an ILOE Certificate?
Obtaining your ILOE certificate is straightforward with the digital resources available. If you’re enrolled in the insurance program and have yet to receive your Certificate of Insurance, the following steps will guide you through the process:
- Navigate to the ILOE portal or utilise the mobile application.
- You will be prompted to select your specific sector, ensuring that the services provided are tailored to your industry or individual requirements.
- Enter your Emirates ID and mobile number to verify your identity and link the certificate to the correct policyholder. You will then be asked to request a one-time password (OTP), which serves as a security measure to protect your personal information.
- After entering the OTP, select ‘View Policy Details’. On this page, you can review the specifics of your insurance policy and download your ILOE certificate.
Ensure that the details on your certificate are accurate. If you discover any discrepancies, contact your insurance provider immediately to address the issue.
How Do I Claim My UAE ILOE Insurance?
If you become unemployed in the UAE, it’s essential to act promptly and follow the necessary steps to file your ILOE (Involuntary Loss of Employment) insurance claim. The claims process is designed to be simple and easy to follow:
1. Check Your Eligibility
To make a claim for ILOE insurance, the following eligibility criteria must be met, as outlined on the official government website:
- The insured must have been subscribed to the Unemployment Insurance scheme for at least twelve (12) consecutive months.
- All insurance premiums must be paid up to date as per the frequency chosen by the insured.
- Unemployment must be due to reasons other than voluntary resignation.
- The insured should not have been terminated from employment for disciplinary reasons, in compliance with the existing laws governing Labour Relations in the Private Sector and Human Resources in the Federal Government.
- Claims must be submitted within thirty (30) days following the end of the employment relationship or the resolution of any labour disputes that have been taken to court.
- The insured must not be subject to any outstanding abscondment complaints.
- The claim should be free of any fraudulent or deceptive practices, and the employer must not be a fictitious company.
- The insured’s unemployment should not be a result of non-peaceful labour actions, such as strikes or stoppages, regardless of whether they caused damage.
- The insured must be legally residing in the United Arab Emirates at the time of the claim.
2. Gather Documentation and Evidence
If you have ensured you are eligible to make a claim, assemble all necessary documents, including your Emirates ID number, employment termination letter, proof of previous salary, evidence that you have been paying your insurance premiums, and any other relevant paperwork as specified by the insurance provider.
3. Submit Your Claim
File your claim with the insurance provider. The Ministry of Human Resources and Emiratisation (MOHRE) provides several methods to facilitate this process, including an online portal, a mobile app, and a call centre (600599555). Make sure to fill out all required forms accurately.
4. Receive Benefits
If your claim is approved, you will start receiving the insurance benefits per your policy’s terms. These benefits are usually a percentage of your average salary and are paid for a fixed duration or until you find new employment.
Approved claims are generally paid out within two weeks, offering prompt economic relief.
Recommendation: Before submitting your claim, we recommend that you obtain a travel report to ensure you can prove that you are legally residing in the UAE. Click this link, which will take you to a services page on the General Directorate of Residency and Foreigners Affairs (GDRFA) website called ‘Issuance of statements (entry and exit movement)’. You will need to provide your proof of identity/passport. The fee will be AED 141 and you will receive your travel report within 48 hours.
ILOE Insurance Penalties
Below are the penalties associated with the mandated ILOE insurance scheme.
- Non-Subscription: A fine of AED 400 is imposed on workers who failed to subscribe to the scheme by September 2023, or within four months of entering the country for work after January 1, 2023.
- Late Premium Payment: If premiums are not paid within three months of the due date, the insurance certificate is cancelled and a penalty of AED 200 is imposed.
- Enforcement of Fines: Fines can be deducted from wages through the Wage Protection System, end-of-service gratuity, or other methods approved by the Ministry. Workers can also request to pay fines in instalments or to have them waived under certain conditions.
- Work Permit Restrictions: Non-compliance with fine payments can lead to restrictions on issuing new work permits until all dues are cleared.
For more details, visit the official document: Ministerial Resolution No. 604 of 2022 Concerning Unemployment Insurance Scheme.
Handling Disputes in the ILOE Scheme
If you are having difficulty with your ILOE claim, we suggest you follow the steps below:
1. Gather Documentation and Evidence:
The first step for an insured individual is to gather all relevant documentation and evidence related to their unemployment claim. This includes employment termination letters, any correspondence with the employer about the termination, and the insurance policy details.
2. File a Claim:
If the dispute arises from a claim denial or disagreement over the payout, the insured should first submit a formal claim through the ILOE Portal or app.
3. Seek Clarification from the Service Provider:
After filing the claim, if there is a disagreement or the claim is denied, the insured should seek clarification from Dubai Insurance. Contact them via telephone at 600 599 555 or via their email at claims@iloe.ae.
4. Lodge a Formal Complaint:
You can file a formal complaint if the issue is not resolved through direct communication with the service provider. This complaint should be directed either to the Ministry of Human Resources and Emiratisation.
5. Seek Legal Advice:
It may be beneficial to seek legal advice, especially if the dispute involves complex issues such as wrongful termination or discrimination. Legal professionals can provide guidance on the strength of the case and the best approach to take.
6. Initiate Court Proceedings:
If the dispute cannot be resolved through the internal mechanisms of the service provider or the Ministry, it may be necessary to escalate the matter to the UAE courts. Legal proceedings should be considered as a last resort due to the time and costs involved.
7. Follow Up:
Throughout the process, it is important for the insured to keep detailed records of all communications and responses related to the dispute. Following up regularly and keeping track of all submissions and received documents is crucial.
Formal Dispute Resolution Mechanisms
The ILOE Scheme in the UAE is designed with robust mechanisms to handle disputes, ensuring fair resolution and compliance with the nation’s laws. Under Cabinet Resolution No. 97 of 2022, specific procedures and governance structures are laid out to manage and resolve any disputes that arise in the administration of unemployment benefits.
Dispute Resolution Process:
1. Jurisdiction:
All disputes related to the unemployment insurance policy fall under the jurisdiction of the United Arab Emirates courts. This legal framework ensures that any disagreements are resolved under the strict guidelines and statutes that govern labour and insurance matters in the UAE.
2. Central Bank Oversight:
The service providers, which are mandated to be licensed and regulated by the UAE Central Bank, must adhere to the conditions and terms outlined in their insurance policy. Any breach of these terms by the service provider can be reported to the Central Bank by the Ministry of Human Resources and Emiratisation. This layer of oversight ensures that the service providers maintain high standards of operation and integrity.
3. Court Rulings:
In cases where employment has ended and there is a dispute over the termination’s circumstances or the legitimacy of the claim, the insured may need to provide a court ruling or evidence that supports their claim. This is especially relevant if the termination was not voluntary or involved complex legal issues.
4. Legal Representation:
While navigating through disputes, insured individuals have the right to seek legal representation to aid their claims and ensure their rights are protected under the law. Legal counsel can provide guidance on submitting claims, adhering to procedural requirements, and representing the individual in court if necessary.
5. Transparency and Fairness:
To foster transparency and fairness, the service provider is required to process claims in accordance with the insurance policy and applicable legislation. This includes a commitment to handle claims promptly and fairly, providing compensation within the stipulated time frame if the claim meets the eligibility criteria.
By setting clear guidelines and establishing a defined legal pathway for resolving disputes, the UAE’s ILOE Scheme ensures that both employees and employers have access to a transparent and equitable system for managing conflicts.
Navigating Towards Financial Security with ILOE
The Involuntary Loss of Employment insurance is pivotal to the UAE’s commitment to workforce welfare and economic stability. It is a testament to the country’s foresight in creating an environment where employers and employees can operate with an added layer of financial security.
Navigating through a job loss can be daunting, but ILOE insurance makes the journey less turbulent. Equipped with the knowledge of how it works, what it covers, and how to claim it, you’re better prepared to face unexpected employment challenges.
We encourage employees to stay informed and employers to ensure compliance, fostering a mutually beneficial landscape for all parties involved in the UAE’s vibrant labour market.
FAQ’s
Is ILOE Insurance Mandatory in the UAE?
Yes, enrollment in the ILOE insurance scheme is compulsory for all employees in the private sector and those working in the federal government sector, excluding investors, domestic workers, temporary contract workers, juveniles under the age of 18, and pension-receiving retirees who have rejoined the workforce. Please note that expatriates working in the UAE are also required to subscribe to the ILOE insurance.
Are Employees Working for Free Zone Registered Companies Required to Subscribe to the ILOE Insurance Scheme?
Yes, as of May 3, 2023, employees working for semi-government entities and companies registered in UAE Free Zones are required to subscribe to the insurance scheme.
How Much Does ILOE Insurance Cost?
The ILOE scheme is divided into two levels based on your basic salary. Category A is for employees earning up to AED 16,000 (USD 4,356), with a monthly premium of AED 5 (USD 1.35) plus VAT. Category B is for those who earn AED 16,000 (USD 4,356) or more, with a monthly premium of AED 10 (USD 2.70) plus VAT.
Which ILOE Insurance Category Do I Apply For If My Salary is Comission-Based?
If your salary is commission-based, you can select the ILOE insurance category that aligns with your projected earnings. It’s important to consult with your employer or the insurance provider to understand their specific rules for calculating the salary in such cases. They might use an average of your earnings over the past few months or another defined period to determine which category you fall into for insurance purposes. If your average monthly earnings have been AED 16,000 or below, you should choose Category A. If your earnings have been above AED 16,000 monthly, Category B would be the appropriate choice.
How Do I Apply for ILOE Insurance?
You can apply through the ILOE portal, mobile app, or via various service providers like exchange centres, business centres, or even through SMS and telecom bills for some services.
Yes, policyholders have the option to negotiate additional benefits with their insurance provider, as per the guidelines and provisions set out in the scheme.
How Can I Check My ILOE Insurance Coverage?
Sign in to the ILOE portal or app with your Emirates ID and mobile number to check your policy details. Get a One-Time Password (OTP) and choose to view your policy details. This will tell you what your coverage includes and any limits you might face.
How is the Compensation Calculated Under ILOE Insurance?
Compensation is calculated at 60% of the average basic salary of the last six months prior to unemployment, with benefits payable for up to three months per claim.
What Triggers the Payout of ILOE Insurance?
Payouts are triggered by involuntary loss of employment, such as redundancies or layoffs, excluding cases of voluntary resignation or dismissal due to disciplinary actions.
How Can I File a Claim Under the ILOE Insurance Scheme?
Claims can be filed through the insurance provider’s online portal, app, or customer service centres, provided that all eligibility criteria are met and necessary documentation is submitted.
What Are the Key Exclusions of the ILOE Insurance Policy?
The policy does not cover voluntary resignation, dismissal for disciplinary reasons, or unemployment due to external factors such as war, pollution, terrorism, government action, or force majeure.
How Long Does It Take to Receive Benefits After Filing an ILOE Insurance Claim?
Approved claims are generally processed and benefits are disbursed within two weeks, providing prompt financial support to eligible claimants.
How Do I Handle Disputes in My ILOE Claim?
To resolve disputes in your ILOE (Involuntary Loss of Employment) claim, review your insurance policy to understand the eligibility and coverage terms. Gather all relevant documents like your termination letter and payment proofs. Submit a formal dispute to your insurance provider detailing why you believe your claim was wrongly denied. If unresolved, follow the provider’s formal appeal process. For further assistance, consult legal advice or contact regulatory authorities like the Ministry of Human Resources and Emiratisation (MOHRE) to mediate the dispute. As a last resort, consider arbitration or litigation.
Are There Any Penalties for Not Subscribing to ILOE Insurance?
Yes, a fine of AED 400 is imposed on workers who fail to subscribe by the designated deadline, or within four months of entering the country for work after January 1, 2023.
What Happens If I Don’t Pay My ILOE Insurance Premium?
If you fail to pay the insurance premiums as per your chosen payment plan and this non-payment extends for more than three months from the due date of the premium, the insurance policy will be cancelled. Additionally, you will be required to pay a fine of AED 200.
If My ILOE Insurance is Cancelled, Can I Subscribe Again?
Yes, you can re-apply for a new insurance policy even if you have had your ILOE insurance cancelled previously.
Who Assesses ILOE Claims?
Insurance adjusters and appraisers are responsible for examining ILOE insurance claims to verify their legitimacy and determine the extent of coverage they are entitled to. They collect necessary information, review the terms of your policy, and assess the financial implications of your unemployment insurance claim. They also manage settlement negotiations and prepare comprehensive reports on their findings.
