UAE Involuntary Loss of Employment Insurance (ILOE)

Most working people will agree that the most important part of any job is security.
There’s always a worry at the back of the mind: What if I suddenly lose my job? What if I don’t have savings? How will I pay my bills? People working in the UAE may feel the same. But UAE is a country that truly cares for its people. That is why the ILOE (Involuntary Loss of Employment) scheme was started.

This insurance helps employees who lose their jobs because of unfortunate, unforeseen events. It gives them financial support until they find a new job. Sounds great? It really is! If you work in the UAE or are planning to do so, you should know about this mandatory insurance scheme.

In this article, let us understand what ILOE insurance UAE is, how it works, and other important aspects related to it.

What is ILOE scheme?

The involuntary loss of employment (ILOE) scheme was introduced in the UAE under Federal Decree-Law No. 13 of 2022 concerning unemployment. This scheme provides financial benefits to employees who lose their jobs due to reasons beyond their control, offering support until they find a new opportunity.

For employees working in both the private and public (government) sectors in the UAE, this scheme brings comfort and sense of relief in the event of involuntary job loss.

How does the ILOE scheme work?

Basically, the ILOE insurance offers financial benefits for certain time period to those who lose their jobs involuntarily. To get this help, the employee must be part of the scheme and must have paid the monthly premium for at least 12 consecutive months.

Then, he can receive a monthly cash benefit of up to 60% of his average basic salary of the six months he was earning prior to job loss. This compensation is provided for a maximum of three consecutive months per claim.

To be eligible, however, the employee must prove that the job loss was due to legitimate, non-disciplinary reasons. No compensation will be provided if the employee was terminated due to misconduct, fraud, or if they resigned on their own. Also, they must not have started a new job while making the claim.

Who is eligible for ILOE scheme?

Emiratis and residents in UAE working in the private and federal government sectors are eligible for the UAE’s ILOE scheme. However, there are certain conditions that they must meet to claim the benefit:

• The employee must be a legal resident in the country.
• The worker/employee must have subscribed to the scheme for a minimum of 12 consecutive months, without any breaks in subscription.
• The reason for unemployment must not be resignation.
• The unemployment must not be due to disciplinary actions against the employee (such as misconduct or poor performance).
• The claim must be submitted within 30 days of job loss.
• There must be no existing absconding complaint filed against the employee.
• The employee must not claim based on a fake employer or fictitious entity. Doing so may result in legal action, penalties, and fines.
• The unemployment must not be due to non-peaceful labour strikes or work stoppages.
• Compensation will not be paid or will cease if the employee gets hired for another job or is already employed at the time of making the claim.

The scheme does not cover job loss where country declares so, such as:

• Resulting from wars, riots, civil unrest, acts of terrorism, or nuclear occurrences.
• Actions by the UAE government against the employer, such as nationalization or confiscation of the employer’s assets, leading to insolvency.

Exempted categories from ILOE scheme

The scheme does not cover the following individuals:

• Investors who work in their own companies in UAE
• Domestic helpers
• Temporary contract workers
• Juveniles under the age of 18
• Retirees who are receiving a pension and have joined a new job

Scheme plan categories

Based on the monthly salary of employees, there are two categories of plans available:

Category A:

For those earning a basic salary of AED 16,000 or below per month

• Premium: AED 5 + VAT per month
• Compensation: Up to AED 10,000 per month

Category B:

For employees earning a basic salary of above AED 16,000 per month

• Premium: AED 10 + VAT per month
• Compensation: Up to AED 20,000 per month

Overview of compensation benefits under ILOE scheme

The monthly compensation is 60% of your average basic salary of the last 6 months before job loss.

• There is a cap on compensation of maximum AED 10,000/month for category A and maximum AED 20,000/month for category B.
• One claim can give you benefits for a maximum of 3 consecutive months.
• In total, across your entire work life in UAE, you can receive claim payment for up to 12 months benefits only, no matter how many claims you make.

ILOE insurance subscription requirement

Subscription to the ILOE insurance scheme is mandatory for all private and federal government sector employees. The subscription to the scheme was made available to employees from January 1, 2023. The UAE government announced October 1, 2023, as the final ILOE last date for employees to subscribe.

Subscription can be made through any of the following channels:

• ILOE Portal: www.iloe.ae
• ILOE Smart App
• ILOE Contact Number: 600 599 555
• Exchange Centers: Licensed centers across the UAE
• Telecom Companies: Through bills and text messages
• Self-Service Kiosks
• Banking Applications and ATMs, of selected banks
• Businessmen Service Centers, specified by the Ministry

How to subscribe for ILOE scheme – online process

The process to subscribe through the website includes the following steps:

Step 1 – Visit the portal

Visit the ILOE website and click on ‘Subscribe/Renew Here’.

Step 2 – Select the right category

Choose plan category A or B as per your salary.

• Category A: For those earning a basic salary of AED 16,000 or below per month
• Category B: For employees earning a basic salary of above AED 16,000 per month

You will also need to enter your details like Emirates ID and mobile number.

Step 3 – Enter the OTP and log in

You will receive an OTP on your number via SMS. Enter that, and you will be logged in.

Step 4 – Navigate the site

After you are logged in, you can see your insurance category, personal details, and total premium for 2 years.

Step 5 – Choose plan and payment

Enter your card details. You can subscribe for one year or two years. You can choose to pay monthly, quarterly, semi-annually, or annually.

Step 6 – Confirm details and complete request

Agree to the terms and conditions and proceed to payment. Click on “Pay Now.” You will be redirected to the payment portal. Enter the card details and verify the transaction by entering the OTP received on your mobile number. Once the payment is successful, you will receive a confirmation.

Step 7 – Get insurance certificate

Once you are successfully subscribed, you will receive your insurance certificate. You can keep a digital copy for yourself.

Please make sure you stay compliant with UAE ILOE policies, pay your premium on time, and keep your personal status, such as job status, updated on the portal.

Wrapping up!

If you fall under the eligible category, mind you that subscribing to involuntary loss of employment insurance is not just beneficial but also a mandatory step that secures your financial stability in the UAE.

Staying updated on the policies and regulations related to it, and paying premiums on time, is necessary to avoid unnecessary issues and delays, especially in case of unexpected job loss. This is something that offers coverage to you only in case of unexpected unemployment.

Please note: The information presented in this article is for informational purposes only and is subject to changes made by the government.

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FAQs

1. Is the ILOE scheme subscription mandatory in the UAE?

The ILOE scheme has been made compulsory for all private and federal government employees in the UAE. However, there are certain exempted categories. It is advisable to check the government’s latest guidelines for updated information.

2. Does ILOE scheme needs renewal?

Yes, your ILOE insurance must be renewed either before its expiry or immediately after. For timely ILOE renewal, you can utilize the authorized channels such as its official website smart app, etc.

3. Can I re-subscribe to ILOE insurance again after it gets cancelled?

Yes, you may re-subscribe for the ILOE insurance but you will need to pay any amount due prior to cancellation along with meeting other requirements.

4. What are the consequences of not paying the insurance premium?

If the insured does not pay the premium within 3 months of the due date, their policy will be cancelled, and they will also need to pay fines as applicable according to the law.

5. How to make a claim under the ILOE UAE scheme in case of job loss?

You can reach out to the approved channels by MOHRE and submit the request along with supporting documents that clearly explain how you lost your job. The Dubai Insurance Company will process the payment within 2 weeks from the date of receiving the claim.

6. Is ILOE insurance beneficial?

Yes, definitely. ILOE insurance is very beneficial. It offers a financial cushion and support to employees who lose their jobs due to unforeseen events. It gives them a sense of security until they can find a new job.

7. Can businessmen get coverage under the ILOE scheme?

No, investors and business owners who work in their own business setup in Dubai or UAE are exempted from this scheme.

8. What is the fine for not subscribing to the ILOE scheme?

Subscription to the ILOE scheme has been made mandatory for all employees, except for exempted categories. Failing to subscribe may result in a fine of up to AED 400*, which must be cleared through MOHRE’s website or other authorized channels.

9. What documents are required to subscribe to the ILOE scheme?

For subscribing to the Dubai insurance ILOE scheme, you would need your Emirates ID card number, unified number, work permit number, and a valid UAE phone number issued in the UAE.