[Updated today 14 March 2023]

The UAE’s mandatory unemployment insurance scheme came into effect on January 1, 2023.

Announced late last year, the Involuntary Loss of Employment (ILOE) scheme extends to both government and private sector employees, and protects them with a cash payout in case of a loss of employment due to termination.

Citizens and expat workers alike stand to benefit from the unemployment insurance. Eligible employees can expect to receive up to three months of cash compensation in case they were let go by their employer.

Here we round up everything you need to know about this UAE-wide rollout.

unemployment insurance

Who is eligible to participate in the scheme?


There are several exclusions that you need to be aware of before signing up for an ILOE plan. The following groups of workers are exempted from the scheme:

  1. Domestic workers
  2. Juveniles under the age of 18
  3. Employees with a temporary contract
  4. Investors or owners of the business in question
  5. Retirees who already claim a retirement pension and/or have joined a new employer


Who contributes to the premium?


It’s important to note that the employer is not required to pay the premium for unemployment insurance. The cost of this is borne by each employee individually – and the premium is a very nominal amount. Keep reading to find out more about how much you need to contribute.

How much are the premium and compensation amounts?


The scheme divides applicants into two categories – A and B. The first is for employees who have a monthly basic salary of AED 16,000 or below.

In category A, subscribers pay a premium of AED 5 monthly, or AED 60 annually. In case of a claim, they can be compensated for up to AED 10,000 per month.

Category B covers those whose basic salary is over AED 16,000. Their premium is commensurately higher. It is AED 10 monthly, or AED 120 annually, and they can claim up to AED 20,000 compensation per month.

An important reminder: All compensation is paid for a maximum period of three months, or till the claimant secures a new job – whichever of these comes first.

Payments can be made monthly, quarterly, semi-annually and annually.

Is there a criteria to claim compensation in case you become unemployed?


In case an employee resigns or is terminated for disciplinary reasons, they will not be eligible to receive the cash benefit of this scheme.

If you have been terminated, you must file your claim for an insurance payout within 30 days of receiving the notice from your employer.

An important clause to note as this scheme is only beginning is that your claims will only be processed if you have subscribed to the plan for at least 12 months.

Where and how can you subscribe to the scheme?


There are a number of means to sign up for the program:

  1. The ILOE portal or app 
  2. Exchange houses
  3. Etisalat and du
  4. Business service centres
  5. Bank ATMs and kiosks

Subscription services will become active on 1 January 2023.


Why should you subscribe?


Why should you subscribe?


Losing a job is tough on many levels – not least financially. For most people in the UAE, their salary is essential to keep their lives and homes running. A sudden loss of income can put a lot into jeopardy – education, housing, utilities, healthcare and more. This is a great opportunity to secure your financial situation in the UAE even if your employer lets you go. The premium is affordable to everyone and is flexible in terms of payment as well – so there’s really no reason not to sign up.

From January 1, 2023, the scheme is mandatory for UAE residents who meet the criteria.

Grace Period


According to the ILOE website, as per the Ministerial Resolution No. 604 of 2022, eligible employees have a grace period of 6 months (till 30 June 2023). If the worker/insured was employed after Jan 1st, 2023, they will have a grace period of 4 months to subscribe, starting from the day they landed in the UAE or Visa Change Status.

Keep an eye on this space to keep up with the latest news or announcements about the UAE’s unemployment insurance program. 

Note: The information is correct to the best of our knowledge as of the 3rd January 2023



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