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UAE launches new unemployment insurance scheme

October 11, 2022 at 4:05 pm

Expatriate workers in the UAE [AAMIR QURESHI/AFP via Getty Images]

The United Arab Emirates launched an unemployment insurance scheme on Tuesday as part of reforms aimed at attracting more talent and investment to the regional business hub amid rising competition, Reuters reports.

The new scheme, originally announced in May, offers compensation for up to three months for public and private sector employees who lose their jobs, the Ministry of Human Resources and Emiratisation said.

The social security scheme “ensures the sustainability of a decent life for Emiratis and resident employees during their unemployment period, while reducing business risks,” the Ministry said in a statement.

It added that the move was aimed at attracting the best international and national talent.

Foreigners make up 85 per cent of the population of the Gulf Arab State, which has been introducing new types of visas and other social reforms to attract and retain skilled workers in the face of competition from Saudi Arabia as it opens up the region’s largest economy.

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Jobless workers will be able to claim 60 per cent of their previous salary, up to a monthly amount of 20,000 dirhams ($5,445.29).

Investors who work in companies they own, domestic helpers, part-time workers, children under 18 and retirees are not eligible under the scheme.

Gulf States Qatar, Oman, Kuwait and Saudi Arabia have provided some form of unemployment support to citizens, while Bahrain also has a form of jobless insurance for resident non-citizen workers.

Permission to reside in Gulf countries like the UAE has traditionally been tied to employment. Under recent reforms, UAE residents whose visa is cancelled can remain for up to six months, versus 30 days previously.