UAE widens eligibility criteria for unemployment scheme
Employees working in free zones and semi-government entities are can now register for the mandatory unemployment insurance scheme.
The Ministry Of Human Resources & Emiratisation announce the changes to the scheme, which came into effect on January 1, 2023 and was made mandatory for employees in the country. However, semi-government entities and free zone employees were previously exempt.
The job loss scheme will pay employees 60% of their basic salary for up to three months from the date of them leaving employment. The scheme has a cap of AED 20,000 (£4,300) a month.
Those who do not apply for the unemployment insurance schemes will face fines starting at the end of the grace period on June 30.
Prices for unemployment insurance range from AED5 to AED10 per month (£1.10–£2.20), and are available from a select group of insurance agencies.
In April, it was reported that more than one million employees in the UAE signed up for the scheme since it was launched.
Applicants can apply by going to iloe.ae website.
About the scheme
The cost is AED5 per month for those earning a basic salary of AED16,000 or less, AED10 per month for those with a salary higher than AED16,000.
The fine for non-subscription is AED400, and AED200 for missing an individual payment.
Those exempted include investors/company owners, domestic helpers, temporary contract workers, juveniles and retired people.
According to the Insurance Pool website, in order to be eligible for compensation, the insured must meet the following criteria:
- There must be a minimum subscription period of 12 consecutive months for the insured in the scheme.
- The insured was committed to pay all the insurance premiums due on time.
- The insured must be able to prove that they are not unemployed because they resigned from their job, or were dismissed for disciplinary reasons.
- Claims must be submitted within 30 days from the date of leaving work.
MENA growth expected to slow
GDP growth in the Middle East and North Africa (MENA) region was higher than expected last year, but is expected to slow down in 2023, according to the International Monetary Fund (IMF).
MENA’s GDP grew by 5.3%, reflecting strong domestic demand and a rebound in oil production.
However, growth is projected to slow to 3.1% this year due to policies to restore macroeconomic stability, agreed OPEC+ oil production cuts, and the general deterioration in the global economy.
After sharp rises in 2022, inflation is forecast to remain high at 14.8% this year before falling slightly in 2024.
In the wake of recent global financial market instability, the region’s financial markets have moved in line with global trends, though countries with large debt burdens have seen a greater impact.
The forecasts were announced at an IMF event to launch the May 2023 Regional Economic Outlook for the Middle East and Central Asia region at the Dubai International Financial Centre.
Jihad Azour, Director of the IMF’s Middle East and Central Asia Department, said: “Amid continued uncertainty, policy trade-offs remain complex, and striking the right policy balance will be critical.
“Monetary policy should focus on maintaining or regaining price stability while being mindful of financial stability risks. Fiscal policy should preserve debt sustainability and build buffers while providing targeted and temporary support to protect the vulnerable.”
He added: “Meanwhile, structural reforms should be accelerated to bolster potential growth and enhance resilience, inclusion, and social safety nets.
“Since March 2020, the IMF has supported MENA countries with $25bn in new financing, including recent Fund arrangements for Egypt, Mauritania, and Morocco—and allocated $42bn special drawing rights to boost the region’s reserve assets.
“The Fund has also increased its presence on the ground by reopening our regional technical assistance office (METAC) and setting up a new regional office in Riyadh, which will strengthen our partnership with the region.
“The upcoming World Bank-IMF Bank Annual Meetings in Marrakech in October will provide a platform for wide-ranging policy discussions on challenges facing the region and the world.”
