Unemployment Insurance Scheme – Great Initiative by UAE Government

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Introducing a much-needed unemployment scheme in the UAE, the government has once again demonstrated its commitment to fair treatment and comprehensive support for both legally employed citizens and those seeking re-employment.

This initiative is a significant stride towards ensuring equal employment market opportunities in a country that boasts stable economic growth and ambitious future planning, demanding a motivated and skilled workforce to achieve its goals. In 2020, the UAE National Bureau of Statistics (NBS) estimated that the country had 6.3 million actively employed individuals, comprising citizens and non-citizens, a number that continues to rise. These individuals not only require equal employment prospects, inclusion, and fair treatment but also government assistance during periods of employment fluctuation.

The COVID-19 pandemic abruptly disrupted the nature of employment, affecting the peace and security it brings to numerous families. This global crisis significantly impacted the vitality of labor markets worldwide, highlighting the urgent need to address and prepare for potential employment scenarios arising from large-scale economic events or health measures. It is crucial to support individuals during periods of unemployment without disturbing the social and economic equilibrium of the country.

The unemployment scheme aims to establish a safety net for all UAE citizens, including expatriates and their dependents, who consider the UAE their home and wish to remain in the country while actively seeking new employment opportunities. This program ensures that individuals can maintain their standard of living until they secure new employment, providing them with much-needed stability during the transitional phase. By offering support and resources to those in-between jobs, the UAE government reaffirms its commitment to the welfare and prosperity of its residents, fostering a sense of security and confidence in the face of employment challenges.

As the UAE continues to evolve and navigate the ever-changing employment landscape, the introduction of this unemployment scheme represents a significant stride towards an inclusive and resilient society. By prioritizing the well-being of its citizens and recognizing the importance of supporting individuals during employment transitions, the UAE solidifies its position as a progressive and compassionate nation that values the dignity and prosperity of all its residents.

In addition to providing financial aid, the “Dhaman” program emphasizes the importance of equipping individuals with the necessary skills and knowledge to enhance their employability. Through training and professional development initiatives, unemployed individuals can acquire new skills, enhance existing ones, and stay updated with industry trends. This proactive approach aims to empower individuals to re-enter the job market with confidence and increase their chances of securing suitable employment opportunities.

Moreover, the “Dhaman” program promotes a sense of security and stability within the UAE’s workforce, fostering a positive and resilient economy. It assures individuals that their contributions to society are valued and that the government is actively working to support them during difficult times.

Overall, the introduction of the “Dhaman” unemployment insurance scheme marks a significant milestone for the UAE in strengthening its social security framework. By combining financial assistance with training and professional development opportunities, the program aims to empower individuals, enhance their employability, and foster a more resilient and prosperous society.

As of 1 January 2023, the United Arab Emirates (UAE) has taken a significant step towards enhancing its social security system by implementing the “Dhaman” unemployment insurance scheme with below particulars:

  1. Financial support: The Dhaman program provides financial support to eligible UAE citizens who have lost their jobs, helping them to cover their basic expenses while they search for new employment. The program provides up to 60% of the individual’s last salary for up to 12 months.
  2. Accessible to all UAE citizens: The program is available to all UAE citizens who have worked for at least one year in the country and have lost their jobs due to circumstances beyond their control, such as company downsizing, bankruptcy, or termination of contract. In accordance with (Federal Decree Law No. 33 of 2021 Regarding the Regulation of Employment Relationship and its amendments) and the Human Resources Law in the federal government, in addition to any applicable legislations.
  3. Helps to reduce the impact of unemployment: The Dhaman program helps to reduce the impact of unemployment on individuals and their families, as well as on the wider economy by maintaining consumer spending and reducing the risk of social unrest, crime and general unhappiness.
  4. Encourages job seekers to find new employment: The program provides financial support for a limited period, sufficient to encourage job seekers to actively search for new employment opportunities and return to the workforce as quickly as possible.
  5. The Dhaman program in the UAE – following are the key terms and conditions of the program:
    • Eligibility: To be eligible for the Dhaman program, individuals must be UAE citizens who have worked in the country for at least 1(one) year and have lost their jobs due to circumstances beyond their control, such as company downsizing, bankruptcy, or termination of contract. Exclusions: The Dhaman program does not cover individuals who voluntarily resign from their employment or who are terminated due to misconduct as defined by the Employment Laws.
    • Maximum duration of support – 12 months from first claim. The amount of support is calculated based on the last employment financial records for the last salary, and can be up to 60% of that amount.
    • Timing of claim: Individuals can and encouraged to apply for the Dhaman program as soon as they lose their legal employment and must expect to receive first financial pay out within three months after registering. During this waiting period, individuals are expected to actively search for new employment opportunities.
    • Active job search requirement: To continue receiving support from the Dhaman program, individuals must be actively searching for new employment opportunities and must attend job search training sessions provided by the Ministry of Human Resources and Emiratization. Note: It’s important to note that the specific terms and conditions of the Dhaman program may be subject to change, and individuals should consult with the Ministry of Human Resources and Emiratization for the most up-to-date information on eligibility and support.

Regulations governing the ‘Unemployment Insurance Scheme’: