INVOLUNTARY LOSS OF EMPLOYMENT INSURANCE WITH ALFRED
That’s why the latest UAE Federal Law, Decree No.(13) of 2022, is welcome news for all those working in the UAE. Read on to find out how ILOE insurance scheme can help you at a time when you need it most.
WHAT IS THE ILOE SCHEME?
Under the terms of UAE Federal Law Decree No.(13) of 2022, the UAE Government has introduced the ILOE insurance scheme, creating compensation and comfort for Public (Government) and Private sector employees alike through the provision of cash benefits in the event of involuntary job loss.
How Does Involuntary Loss of Employment Work?
If you’re a member of the Scheme, and have been paying regular contributions towards your membership, you’re protected should you lose your job through redundancy, and entitled to claim cash benefit for up to 3 consecutive months per claim. You’ll need to prove that you lost your job involuntarily, had no influence on your job loss (you weren’t terminated through gross misconduct or poor job performance, for example), and are not in fresh employment when you make your claim.
How Much Does The Scheme Cost To Join?
The Scheme operates under a two-tier system:
Category A
for those earning a basic salary of up to AED 16,000 per month
Category B
for those earning basic salaries beyond AED 16,000 per month.
Premium contributions are based according to category with:
Category A
members paying AED 5 per month.
Category B
paying AED10 per month.
Premiums are subject to Value Added Tax at the prevailing rate (5% as at November 2022).
HOW ARE ILOE INSURANCE BENEFITS CALCULATED?
Under the ILOE insurance Scheme, claimants can receive monthly compensation up to 60% of their average monthly salary over the 12 months immediately prior to the ILOE event: with claims capping prescribing the maximum benefits payable.
Category A
members the maximum claim benefit is AED 10,000 per month
Category B
members the maximum claim benefit is AED 20,000 per month
The maximum compensation for any one claim is 3 months’ consecutive benefit.
Note that there is a maximum/cap on the total amount of benefits payable throughout a member’s working life in the UAE, and this has been set at 12 monthly benefits (regardless of the number of valid claims submitted and settled).
What Makes A Valid Claim?
For a claim to be accepted and settled, it must satisfy the eligibility criteria stipulated by the Federal Law Decree No.(13) of 2022, which are:
The Insured must have subscribed to the scheme for a minimum subscription period of (12) twelve consecutive months, with any gap or interruption in this subscription being for less than three consecutive months
The Insured paid all insurance premium subscriptions due on time
The Insured proves that the reason of unemployment is not due to resignation
The Insured was not dismissed for disciplinary reasons as stated under the Labour Relations Law and the Human Resources Law of the UAE Federal Government, in addition to any other relevant/applicable legislation
The Insured must submit the claim within (30) thirty days from the date of loss of the work relationship or the settlement of the labour complaint referred to the judiciary
The Insured worker should not have an existing complaint related to their absence from work.
The Insured shall not be entitled for compensation if there has been fraud or deceit involved in his claim, or if the organisation/employer where he works for is proven to be fictitious
The Loss of Employment should not be the result of non-peaceful labour strikes or stoppages, whether they result in harm or not.
The Insured must be legally present in the United Arab of Emirates
The loss of Employment should not be the result of one of the following reasons:
As a result of war, declared or undeclared, riot, insurrection, armed rebellion, revolution, military or usurping force, invasion, act of a foreign enemy, hostilities, civil war, or civil disorder.
As a result of a discharge of pollutants, a nuclear event, a radioactive, toxic, explosive or other dangerous effect of any explosive nuclear equipment or part of such equipment.
As a direct or indirect result of biological or chemical pollution resulting from or contributing to terrorism.
As a result of a direct action by the government of the United Arab Emirates that led to the expropriation or nationalization of the employer’s facility, or the confiscation of his money leading to his insolvency
As a result of the occurrence of force majeure in accordance with the Civil Transactions Law of the United Arab Emirates No. (5) of 1985
Involuntary Loss of Employment AT A GLANCE
Refer to our handy summary tables to view the main features of the ILOE Scheme at a glance……
AED 5
Per Month
Category A
AED 5 / Month or AED 60 / Year or AED 120 / 2 Years
Monthly Benefit
60% of subscribed salary capped at AED 10,000 per month payable for up to 3 x consecutive months
*(subject to Value Added Tax @ prevailing rate)
AED 10
Per Month
Category B
AED 10 / Month or AED 120 / Year or AED 240 / 2 Years
Monthly Benefit
60% of subscribed salary capped at AED 20,000 per month payable for up to 3 x consecutive months
*(subject to Value Added Tax @ prevailing rate)
SOME FREQUENTLY ASKED QUESTIONS
Wow, this is all a bit different isn’t it? How does it all work? What’s Alfred’s favorite color? And other frequently asked questions.