ILOE unemployment insurance: who must subscribe and what it pays

ILOE, the UAE’s unemployment insurance scheme, is compulsory for private-sector and federal government employees, apart from five excluded groups. It costs AED 5 a month plus VAT for a basic salary up to AED 16,000 and AED 10 above it. After 12 months’ subscription, a worker who loses their job other than by resignation or disciplinary dismissal can claim 60% of basic salary for up to 3 months.

Key takeaways

• ILOE is compulsory for private-sector and federal government employees, except investors who own their business, domestic workers, temporary-contract staff, under-18s and retirees on a pension who take a new job.
• The premium is no more than AED 5 a month for a basic salary up to AED 16,000 and AED 10 a month above it, plus VAT.
• A claim pays 60% of the average basic salary of the last 6 months for up to 3 months, capped at AED 10,000 or AED 20,000 a month.
• A claim needs 12 months of continuous subscription and must be filed within 30 days; resignation and disciplinary dismissal do not qualify.
• Not subscribing, and not paying the premiums, are each fined AED 400.

On this page 11 sections

What ILOE is

ILOE stands for Involuntary Loss of Employment, the operator’s name for the unemployment insurance scheme created by Federal Decree-Law No. 13 of 2022, so “ILOE” and “unemployment insurance” mean the same scheme. It pays a limited monthly cash benefit to a worker who loses their job, in return for a small monthly premium that the worker is required to pay.

Cabinet Resolution No. 97 of 2022 sets the procedures and controls for implementing the scheme. Policies are issued by a pool of insurers, with Dubai Insurance as pool manager, and sold through the scheme website iloe.ae, the ILOE app and other channels approved by the Ministry of Human Resources and Emiratisation (MOHRE).

Who must subscribe

Every employee in the private sector or the federal government sector must subscribe, whether Emirati or expatriate, unless they belong to one of five excluded groups.

Employees who are covered

u.ae and iloe.ae both name Emiratis and residents working in the two sectors. The Decree-Law defines the federal government sector as the ministries and the federal authorities, institutions and regulatory bodies affiliated with the federal government (Article 1).

The five excluded groups

Five groups are excluded from the scheme; the scheme site calls them exempted categories.

Who is excluded

5 excluded categories

Excluded from the unemployment insurance scheme are investors who own the establishment they work in, domestic workers, employees on temporary contracts, juveniles under 18, and Emiratis who meet the conditions for retirement or retirees receiving a pension who take a new job.

The Decree-Law’s English translation describes the excluded investors as business owners who own the entire business and manage it themselves, and lets the Cabinet change the scope on the Minister’s proposal (Article 3).

Emirati employees

The official pages set no separate categories, premiums, benefit or fines for Emiratis. The exclusion that concerns them is the fifth: Emiratis who have met the conditions for retirement, or retirees receiving a pension who join a new job. Hiring targets for Emiratis are separate rules, covered in Emiratisation rules.

The two categories and what they cost

The premium depends on the basic salary in the employment contract, not on total pay, and there are only two levels.

Monthly premium

AED 5 / AED 10 a month (16,000 basic salary threshold)

Under the Involuntary Loss of Employment (ILOE) unemployment insurance scheme, a worker in the first category (basic salary up to AED 16,000) pays a premium of no more than AED 5 a month, and a worker in the second category (basic salary above AED 16,000) pays no more than AED 10 a month.

At exactly AED 16,000 the official wordings differ: u.ae puts a basic salary of less than AED 16,000 in the first category, while the scheme site and the policy terms say 16,000 AED or below. The table follows the operator, which issues the policies.

A worker paid on commission whose contract sets no basic salary may choose either category. If the basic salary rises during a policy, the policy terms let the worker ask to pay the higher premium for past and later instalments, with the policy period unchanged.

A policy is bought for a fixed period, and VAT is added to the premium.

Policy period and VAT

1 or 2 years; full VAT on the first payment

An Involuntary Loss of Employment (ILOE) insurance policy is available for a period of 1 year or 2 years, and the full VAT amount for the policy is added to the first instalment or payment.

The scheme quotes the premiums plus VAT, and the examples below apply the standard rate; the supplies taxed at other rates or exempt are covered in VAT rates, zero-rated and exempt supplies.

Standard VAT rate

5%

UAE VAT is charged at a standard rate of 5% on taxable supplies and imports of goods and services, unless a supply is zero-rated or exempt.

Subscribing on the ILOE portal or app is free. The scheme site says the other channels, such as exchange houses, business service centres, kiosks, bank apps and SMS, are subject to an additional service charge on subscription, and gives no amounts.

Worked example

Premium for a 1-year Category A policy

The policy choice is an illustration, and the premiums are the maximums the rules allow.

1. Premium before VAT: 12 months × AED 5 = AED 60.
2. VAT: AED 60 × 5% = AED 3.
3. Total for the year: AED 60 + AED 3 = AED 63.
4. Paid monthly, the first payment carries all the VAT: AED 5 + AED 3 = AED 8, followed by 11 payments of AED 5 (AED 55).

All four plans on the same basis:

Policy	Premium before VAT	VAT at 5%	Total
Category A, 1 year	AED 60	AED 3	AED 63
Category A, 2 years	AED 120	AED 6	AED 126
Category B, 1 year	AED 120	AED 6	AED 126
Category B, 2 years	AED 240	AED 12	AED 252

Category A, 1 year: AED 63 in total, with a first monthly payment of AED 8.

Paying, renewing and cancellation

Under the policy terms, a policy renews automatically while the worker stays in UAE employment and keeps paying, and is cancelled when a payment is more than 90 days overdue.

Renewal and cancellation

Automatic renewal; cancelled after 90 days unpaid

An ILOE insurance certificate runs for at least 12 months and renews automatically for the worker's period of service in the UAE while premiums are paid; premiums can be paid on a monthly, quarterly, semi-annual or annual schedule, and the certificate is cancelled if a payment is more than 90 days overdue, with the worker bearing the fines under the law and no refund of premiums already paid.

The scheme FAQ says a worker whose policy was cancelled for non-payment must subscribe again with a new policy; iloe.ae has a “Subscribe/Renew Here” link. From the old policy, the worker still owes the premiums that fell due and were not paid before the cancellation, but not the rest of its premium (policy terms, section III). The terms also count a cancellation as an interruption of the subscription, and a claim needs 12 consecutive months without an interruption of more than three months.

What ILOE pays after a job loss

ILOE replaces part of the basic salary, not full pay, for a few months after a job loss.

Benefit and caps

60% of basic salary; cap AED 10,000 / AED 20,000 a month; 3 months per claim

An eligible insured worker receives 60% of the average basic salary of the 6 months before the job loss, for up to 3 consecutive months per claim, capped at AED 10,000 a month in the first category and AED 20,000 a month in the second; total payments over the worker's working life in the UAE may not exceed 12 monthly benefits.

The base is the basic salary, so allowances do not raise the benefit. In Category A, 60% of AED 16,000 is AED 9,600, below the AED 10,000 cap. Payments stop if another employer hires the worker during the three months (Decree-Law, Article 5).

Once three months of benefit have been paid during one certificate period, in one claim or several, the policy terms cancel the certificate, and a new claim needs another 12 consecutive months of subscription. Under Article 6 of the Decree-Law, the benefit does not affect other statutory entitlements, such as the end-of-service gratuity.

Worked example

Monthly benefit in Category A and in Category B

The salaries are illustrations.

1. First worker, Category A: basic salary AED 11,000 for 2 months, then AED 12,500 for the last 4 months before the job loss. Six-month total: (2 × AED 11,000) + (4 × AED 12,500) = AED 22,000 + AED 50,000 = AED 72,000.
2. Average: AED 72,000 ÷ 6 = AED 12,000.
3. Benefit: AED 12,000 × 60% = AED 7,200 a month, under the AED 10,000 cap.
4. Three months: 3 × AED 7,200 = AED 21,600.
5. Second worker, Category B: average basic salary AED 40,000. AED 40,000 × 60% = AED 24,000, above the cap, so the benefit is AED 20,000 a month.
6. Three months: 3 × AED 20,000 = AED 60,000.

Maximum for one claim: AED 21,600 for the first worker and AED 60,000 for the second.

Who can claim and how

A worker can claim after at least 12 continuous months of paid-up subscription, when the job ended for a reason other than resignation or disciplinary dismissal, by filing within 30 days.

Eligibility conditions

Claim conditions

12 months' subscription; claim within 30 days; not resignation

To claim, the insured worker must have been subscribed for at least 12 continuous months, have paid the premiums, have lost the job for a reason other than resignation (or disciplinary dismissal), and file the claim within 30 days of the end of employment or of the resolution of a labour dispute.

u.ae and the policy terms add further conditions. A claim fails if:

• there is an open absence (absconding) complaint against the worker;
• the claim involves fraud or deceit, or the employer turns out to be fictitious;
• the job was lost because of strikes or non-peaceful protests, whether or not they caused damage;
• the worker is not present in the UAE; the policy terms say legally resident.

The policy terms also exclude job losses caused by war or civil commotion, pollution or nuclear incidents, biological or chemical contamination from terrorism, and UAE government action that expropriates, nationalises or seizes the employer or its assets. Which endings of a contract count as resignation or dismissal is covered in how employment contracts end.

Filing the claim

Claims are filed on the ILOE portal at iloe.ae, in the ILOE app or through the ILOE call centre on 600 599 555, with the document showing the date and reason for the job loss. Where a labour complaint has gone to court, the policy terms also ask for an undertaking to provide the final judgment, and the worker keeps paying premiums while the work permit is valid. The 30 days then run from the settlement of the complaint.

When the payment arrives

Payment time

Paid within 2 weeks of the claim

The insured worker submits a claim to the insurance provider within 30 days of the end of the employment relationship; the provider reviews it and pays the compensation within two weeks of the submission date, and compensation stops if the worker finds a new job during the entitlement period.

The insurer transfers the money to the account the worker names. A complaint about how the policy is applied goes to the insurer first, which has a set time to answer under the policy terms; after that period the worker can complain to the Central Bank of the UAE.

Fines for not subscribing or not paying

There are two fines of the same amount: one for not subscribing and one for not paying the premiums.

ILOE fines

AED 400

A worker who does not subscribe to the unemployment insurance scheme is fined AED 400, and a worker who does not pay the premiums is fined AED 400.

The amounts are those on u.ae, which lists Ministerial Decision No. 340 of 2023, on amendments to the scheme’s penalties, among the scheme’s rules. Neither u.ae nor iloe.ae explains how a fine is checked or settled. The ILOE portal shows whether a policy is active and what premiums are due.

Checking your subscription

A subscription is checked on the ILOE portal at iloe.ae or in the ILOE app, with the Emirates ID and the mobile number. The scheme FAQ gives these steps:

1. Open the ILOE portal or the ILOE app.
2. Choose the sector: private or federal government.
3. Enter the Emirates ID and mobile number and request a one-time password (OTP).
4. Select View Policy Details to see the certificate, or View Statement to see the amount due.

If no record appears, the scheme site sends private-sector employees with a MOHRE work permit to MOHRE, through a support ticket on its website or app or its call centre on 600 590 000. Federal government employees contact the human resources department of their employer.

ILOE at a glance

The main rules in one table:

More on contracts, pay and leave is in the Employment and payroll guides.