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Losing your job unexpectedly can be a stressful experience, especially if your residency status is tied to your employment, as is often the case in the UAE. To address this, the UAE government introduced the Involuntary Loss of Employment (ILOE) insurance scheme, designed to protect employees from sudden financial hardship.
In this article, we’ll explain exactly what ILOE insurance is, who needs to enrol, the benefits provided, associated costs, and how to navigate the claims process, so you can stay informed, compliant, and financially secure.
What is the ILOE Insurance Scheme?
The Involuntary Loss of Employment (ILOE) insurance scheme is a mandatory unemployment insurance program in the UAE that provides financial security to workers who lose their jobs for reasons beyond their control. Launched in January 2023 under Federal Decree Law No. 13 of 2022, the scheme acts as a safety net by offering temporary income support to employees laid off involuntarily.
It is essentially a form of social security designed to ensure a “dignified life” for unemployed workers and to make the UAE job market more attractive to talent. In exchange for a small insurance premium during employment, the ILOE scheme will pay out a cash benefit to eligible individuals if they lose their job involuntarily.
Additionally, under Cabinet Decision 97/2022 Article 11, employees may negotiate optional top-ups such as higher ceilings or extended cover beyond the standard ILOE insurance policy.
Who Needs to Enrol, and Is It Mandatory?
Who is Required to Subscribe?
By law, every private-sector or federal employee—Emirati or expatriate—must subscribe to the ILOE insurance scheme. This requirement also extends to employees in free zones (with the notable exception of certain zones like the DIFC, which has separate rules). In short, if you hold a work permit and draw a salary in the UAE, you most likely need to be enrolled in the ILOE insurance scheme.
Exemptions:
Only a few categories of workers are exempt from the mandatory subscription. These include:
- Investors and business owners who own and manage their company (i.e., partners or proprietors not working as an employee for someone else).
- Domestic helpers (housemaids, nannies, drivers, etc.).
- Employees on temporary/part-time contracts (short-term work permit holders).
- Juveniles under 18 years old.
- Retirees who are already receiving a pension and have joined a new job.
Everyone else in regular employment must enrol in the scheme. There is no distinction between full-time or part-time salaried employees – if you have an active employment visa or labour card (outside the exempt categories), you are expected to subscribe.
Why is ILOE Important, and What Does It Cover?
Losing a job can be financially devastating, especially in a country like the UAE, where residency is often tied to employment. The ILOE scheme is important because it offers a financial cushion that can help you cover basic expenses like rent, bills, and groceries while you search for new employment.
From a broader perspective, the program also encourages top talent to work in the UAE by providing a safety net, and it contributes to economic stability by maintaining consumer confidence even when layoffs occur.
Coverage and Benefits:
If you are subscribed to ILOE and you lose your job involuntarily (for reasons other than resignation or termination for cause), you are entitled to monthly cash compensation. The compensation is up to 60% of your average basic salary (as per the last six months of employment before losing the job) and is paid for a maximum of 3 months per claim. You receive about 60 % of your salary each month, up to the caps shown below. The payments will cease once you either find a new job or after three months, whichever comes first.
However, to qualify for this compensation, you must have been continuously subscribed and paying premiums for at least 12 consecutive months prior to losing your job. In other words, you can’t sign up at the last minute when you sense a layoff coming – you need one year of contributions to be eligible to claim. Additionally, you cannot claim if you resigned voluntarily or were dismissed for disciplinary reasons (in those cases, the insurance will not pay out).
Benefit Limits:
The scheme has set maximum payout limits. The amount you receive per month is capped based on your salary category (explained in the next section). Even at 60% of salary, the insurance will pay no more than a certain ceiling each month (e.g., up to AED 10,000/USD 2,722 for the lower-salary category, or up to AED 20,000/USD 5,445 for the higher-salary category).
Over your entire UAE career, you can draw no more than 12 months of ILOE payments in total (for example, four separate claims of 3 months each over the years).
ILOE Plans and Premium Costs
The ILOE insurance is very affordable. The UAE government has deliberately kept the premium low so that it doesn’t burden employees. There are two plan categories based on your monthly basic salary:
- Category A: For employees with a basic salary of AED 16,000 (USD 4,356) or less. The premium is AED 5 (USD 1.30) per month, plus VAT. This comes to about AED 60 (USD 16) + VAT for a full year. The maximum monthly compensation under this category is AED 10,000 (USD 2,722) per month (even if 60% of your salary would be higher, you cannot get more than AED 10k each month).
- Category B: For employees with a basic salary above AED 16,000 (USD 4,356). The premium is AED 10 (USD 2.6) per month (plus VAT), equivalent to AED 120 (USD 32) + VAT annually. The maximum monthly compensation under this category is AED 20,000 (USD 5,445) per month.
These fixed premiums mean that whether you earn AED 5,000 or AED 15,000, you pay the same AED 5 (USD 1.3) monthly in Category A; if you earn AED 17,000 or AED 50,000, you pay AED 10 (USD 2.6) monthly in Category B. The benefit, however, is subject to the percentage and cap as noted (60% of your basic pay up to the cap).
|
Category |
Salary Band |
Premium (per month) |
Annual Premium |
Max. Monthly Benefit |
|---|---|---|---|---|
|
A |
≤ AED 16,000 (USD 4,356) |
AED 5 (USD 1.3) |
AED 60 (USD 16) |
AED 10,000 (USD 2,722) |
|
B |
> AED 16,000 (USD 4,356) |
AED 10 (USD 2.6) |
AED 120 (USD 32) |
AED 20,000 (USD 5,445) |
Payment Options:
You can choose how to pay your premiums to suit your convenience. The insurance can be purchased on an annual policy term of one year (renewable) or even two years, and you may pay the premium monthly, quarterly, semi-annually, or all at once for the year. The 5% VAT is charged in full with your first payment, even if you pay the premium monthly. For example, some people opt to pay AED 60 (USD 16) + VAT once for the whole year up front, while others might pay AED 5 (USD 1.3) each month plus the one-off VAT in month 1. The flexibility in payment schedule does not change the cost or benefits; it’s purely for convenience. Just be sure to pay on time according to your chosen schedule to avoid any lapses.
How to Enrol in the ILOE Scheme Online
Enrolling in ILOE is a simple process and can be done online in a matter of minutes. Employees are responsible for their own enrollment (though employers may assist or remind staff, ultimately it’s tied to your personal Emirates ID). Here’s how to register for ILOE insurance online via the ILOE portal:
1. Visit the Official ILOE Website:
Go to the official ILOE portal at www.iloe.ae. On the home page, click the “Subscribe/Renew Here” button (it’s usually highlighted in red in the centre of the page).
2. Choose Your Employment Sector:
You will be directed to the subscription form. Select whether you are a Private Sector employee or a Federal Government employee. This ensures you’re categorised correctly. Then enter your personal details – typically your Emirates ID number (or Unified ID) and your registered mobile number. You’ll receive a one-time password (OTP) on your phone to verify your identity.
3. Select the Plan and Payment Schedule:
The system will automatically determine if you fall under Category A or B based on your salary (you’ll see this on the screen). Next, choose your subscription period (1 year or 2 years) and your payment frequency (monthly, quarterly, semi-annual, or annual) according to your preference. The portal will display the total premium cost and coverage dates for your selection.
4. Complete Payment:
Review the terms and conditions, tick the acceptance box, and proceed to payment via credit/debit card. Once successful:
- You will receive an email with your insurance certificate attached (PDF).
- The certificate can also be downloaded at any time from your ILOE dashboard – click “View Policies” → “Download Certificate” for a stamped copy. Keep this certificate for your records; HR departments often request it when renewing work permits.
Alternate Enrollment Channels:
If you prefer not to use the online portal, the UAE government has provided multiple channels to subscribe to ILOE – note that some of these may involve a small service fee on top of the basic premium:
- MOHRE Mobile App: You can subscribe via the MOHRE app (available for download on Apple or Google Play), which has an ILOE section. This is similar to the web portal process in terms of steps.
- Exchange Houses: Certain exchange centres like Al Ansari Exchange branches across the UAE can process your ILOE subscription in person (they accept cash for the premium). Just visit a counter and request to subscribe to the unemployment insurance scheme.
- Business Service Centres: Government-authorized centers such as Tas’heel or Tawjeeh (which handle labor/employment services) can also register you for ILOE. This is useful if you need assistance or don’t have reliable internet access.
- Telecom SMS: If you are an Etisalat (e&) mobile customer, you can enroll via SMS. Send a text message with the format ID <YourEmiratesIDNumber> to 2120. For example: ID 784123456789012 to 2120. You’ll get a confirmation and further instructions via reply SMS. (Du users may need to use other channels as of now.)
- Kiosks and ATMs: There are electronic kiosk machines (like UAE’s Upay or MBME payment kiosks found in malls and supermarkets) where you can follow prompts to subscribe. Additionally, some bank ATMs or digital banking apps have begun offering ILOE insurance sign-ups as well.
- Phone Call Center: The ILOE insurance pool has a call center at 600-599-555. They can guide you, though actual payment would be through one of the above channels or a payment link.
The online portal is the easiest and fee-free option, but other channels are available for convenience. Regardless of how you enrol, your details go into the same system and you’ll receive the same insurance certificate.
Deadlines, Renewal, and Penalties for Non-Compliance
Initial Subscription Deadlines:
When the scheme was first introduced, employees already working as of January 2023 were given until 30 June 2023 to subscribe, later extended to 1 October 2023 as a final deadline. By that date, millions of employees had enrolled.
As of 1 October 2023, if an eligible employee fails to subscribe, a fine of AED 400 (USD 109) will be imposed by the Ministry of Human Resources and Emiratisation (MOHRE). This fine is essentially a penalty for non-compliance with the law.
New employees starting after the scheme’s introduction must subscribe within four months of their work permit being issued. If they fail to do this, they will likewise incur an AED 400 (USD 109) fine for late subscription. This applies to all new hires going forward.
The fines are typically tracked in the MOHRE system – for example, when you next renew your work visa or labor card, the authorities may check if you have the insurance, and if not, the fine must be paid.
Renewal Requirements:
The ILOE insurance policy must be renewed every 1 or 2 years, depending on your chosen plan duration. Coverage isn’t lifelong or automatic; you must actively renew your subscription, similar to car or health insurance. Currently, the renewal cycle operates on a two-year basis. Even if you initially paid for one year, your policy must be renewed by the end of the second year at the latest.
Mark your renewal date clearly after your initial enrolment. A 3-month grace period applies for renewal payments. If you miss your deadline, you still have up to 90 days to pay your premium. However, if you fail to pay within this period, your policy is cancelled, causing you to lose continuous coverage. Cancellation resets your 12-month contribution requirement, meaning you’ll have to subscribe again and wait another year before you’re eligible to claim benefits.
There are also financial penalties if your policy lapses. If your premium remains unpaid for more than 3 months, you’ll incur a fine of AED 200 (USD 54), and your policy will be cancelled.
If any fines remain unpaid for over 3 months, the government may deduct them directly from your wages through the Wages Protection System or from your end-of-service benefits.
Summary of Penalties:
|
Trigger |
Fine |
Additional Consequences |
|---|---|---|
|
Never enrolled (4-month grace expired) |
AED 400 (USD 109) |
Work-permit renewal blocked until fine paid |
|
Policy lapse > 3 months (premium overdue) |
AED 200 (USD 54) + policy cancelled |
12-month contribution clock resets |
|
Fine unpaid > 3 months |
Outstanding amount auto-deducted from salary / EOSB |
Emirates ID or visa renewal may be halted |
Important: These fines are imposed on the employee, not the employer. Employers are not responsible for paying your unemployment insurance or your fines, but they might check that you have subscribed since it’s legally required. In fact, MOHRE has indicated that work permit transactions (like new visas or renewals) could be hindered if an employee hasn’t complied with the insurance mandate.
Renewal Tip: You will usually get an SMS reminder from the insurance pool (often from a sender named “DIN” or similar) when your renewal is due. Don’t ignore such messages. Renew via the same channels (online, exchange, app, etc.) as you did initially. The process for renewal is essentially the same as enrolling – just ensure you do it before your current policy expires or within the grace period.
Making a Claim with ILOE
1. File Your Claim
File within 30 days of your termination date via the ILOE portal, app, or call centre.
2. Upload/attach:
- Termination or redundancy letter
- Last six months’ payslips (or salary certificate)
- Bank IBAN letter for benefit transfer
3. Insurer review period:
Maximum 14 calendar days. You will receive approval, rejection, or a request for more information.
4. Payment schedule:
Once approved, benefits are credited monthly in arrears to your nominated bank account.
5. Find a job early?
Inform the insurer; payments cease from the new employment start date.
Disputes: If you disagree with a decision, escalate in writing to the insurer; unresolved issues may be referred to the Insurance Dispute Resolution Committee (IDRC). The IDRC’s decision is binding unless either party takes the matter to court within 30 days.
Resolving Disputes
1. Insurer Complaint:
Raise a formal complaint with Dubai Insurance (lead administrator) or the relevant participating insurer. They have 15 days to reply.
2. IDRC:
Lodge the case with the Insurance Dispute Resolution Committee under the Central Bank of the UAE. Most cases are resolved within 20 working days and can include mediation.
3. Courts / Arbitration:
If still unresolved, either party may escalate to the competent UAE court or to arbitration (if contractually provided).
Example: How ILOE Provides a Safety Net
To understand the impact of ILOE, consider this hypothetical example of how it works in practice:
Example:
Fatima, a marketing executive in Dubai, has been working at her company for three years. In 2025, due to an economic downturn, the company has to downsize, and Fatima is laid off (her employment is terminated involuntarily, through no fault of her own). Fortunately, Fatima had enrolled in the ILOE scheme back in 2023 and has maintained her contributions for over 12 months. Upon losing her job, she immediately submits an unemployment insurance claim through the ILOE online portal.
Within two weeks, her claim is approved, and the insurance begins paying out 60% of her basic salary each month. Fatima’s basic salary was AED 10,000, so she is eligible for AED 6,000 per month in compensation. She receives this amount for the next three months while she searches for a new job. This money helps her cover her apartment rent, utility bills, and groceries during the job hunt, easing the financial stress of unemployment.
Two months later, Fatima lands a new job, and her ILOE payments stop (benefits only run while you are unemployed, up to three months).
Many others have benefited similarly – by January 2025, over 9 million employees in the UAE had subscribed to ILOE, and the scheme has been cited as an important step in strengthening the labor welfare system.
Protect Yourself with the ILOE Insurance
ILOE insurance is now part of life for UAE employees, much like visa renewals or ID registrations, and it ensures that if the worst happens, you won’t be left completely without income.
By knowing what ILOE covers, who must enrol, how to enrol, and why it exists, you can ensure you’re compliant with the law and financially protected. If you haven’t yet subscribed and you’re an eligible employee, make it a priority to sign up as soon as possible. And if you’re already subscribed, renew on schedule. A tiny monthly fee buys a vital safety net, letting you focus on your career with confidence.
Frequently Asked Questions
Do I still need to pay the ILOE premium if I’ve already claimed the full 12 months of benefits?
Yes, even if you have already claimed the full 12 months of ILOE benefits, you are still required to continue paying your premium, as enrolment remains mandatory under UAE labour law and non-payment can result in fines or issues with visa renewals.
Do government and free zone employees need to subscribe as well?
Federal government employees are explicitly included. Free zone employees (e.g., those in TECOM, JAFZA, Abu Dhabi’s ADGM, etc.) are also required to enroll, as the scheme was expanded to cover free zones in 2023. Note: If you work for a local (non-federal) government department, check with your HR – many local entities also implemented it, but the mandate was primarily for the federal and private sectors. It’s safer to subscribe if you’re eligible, to avoid any fines or surprises.
Do DIFC employees need to enrol in the ILOE insurance scheme?
At present, employees of the Dubai International Financial Centre (DIFC) are not obliged to enrol in the UAE’s Involuntary Loss of Employment (ILOE) scheme. The DIFC Authority has confirmed that ILOE is not mandatory for individuals working within DIFC, as the Centre operates under its own regulatory framework. While ILOE coverage is generally compulsory for other private-sector workers across the UAE, it does not apply within DIFC jurisdiction.
If I find a new job or leave the UAE, what happens to my ILOE coverage?
If you find a new job after being unemployed, any ongoing claim payments will stop (you can’t receive insurance money once you’re employed again). Your insurance policy itself, however, can continue as long as you keep paying premiums. In fact, you should continue it with your new employer in mind, as it stays with you (not tied to one employer). If you change jobs within the UAE, you do not need to start a new policy – your existing ILOE subscription carries over to your next job. Just update your payment method if needed and keep it active. On the other hand, if you permanently leave the UAE, the insurance won’t be of use (you typically must be in the UAE to claim, and coverage ceases if you depart the country). An expat who cancels their visa and exits the UAE can generally cancel the insurance (no refunds of premiums, though) and would need to start fresh if they return on a new employment visa later.
How quickly will I receive ILOE payments after losing my job?
Once your claim is submitted, the insurance provider has up to 14 days to review and issue the first payment.
Do I have to involve my employer in the subscription or claims process?
No. ILOE is your personal responsibility, and you must subscribe and file claims directly with the insurer. Your employer doesn’t manage this unless they choose to assist or cover the cost voluntarily. While some companies may enrol staff as part of HR compliance, MOHRE has confirmed that employers are free to do so at no extra cost beyond the minimal premium. If your company doesn’t handle it, you’ll need to ensure you stay subscribed yourself.
How do I check if I have any fines or need to renew my ILOE?
If you’re unsure about your payment status or suspect you missed a payment, you can use the ILOE Quick Pay portal or the MOHRE app to check. On the MOHRE app/website, navigate to the “Unemployment Insurance (ILOE) Quick Pay” service. By entering your Emirates ID, the system will show if you owe any premiums or fines. It will also allow you to pay them online instantly. Alternatively, visiting a Tas’heel center or calling the hotline can help retrieve this information. It’s a good idea to periodically verify your status, especially around renewal time.
Does the ILOE insurance affect my end-of-service gratuity or other benefits?
Not at all. The ILOE scheme is completely separate from your end-of-service gratuity, pension (if any), or any termination benefits your employer must pay under the labor law. You still receive your gratuity from your employer as usual when you leave a job, and any other owed salary or benefits. The ILOE insurance is an additional financial support from an insurance pool (backed by the government mandate) and does not reduce or replace what your employer owes you. Think of it like how having car insurance doesn’t change the warranty on your car – it’s a different mechanism. So, you should pursue your normal end-of-service entitlements independently, and if eligible, file an ILOE claim as a supplement to help you after those funds.
Is the ILOE premium refundable if I never file a claim?
No, the premiums are not refundable. ILOE is an insurance policy, not a savings scheme. Just like health or car insurance, if you don’t end up using the coverage, the paid premiums remain pooled to support those who do need to claim. The cost is low (only AED 5-10/USD 1.30-2.60 a month), and it provides peace of mind. Instead of viewing it as money lost, think of it as buying protection – hopefully, you never have to use it, but it’s there if you need it. There is no option to “cash out” your contributions later; it’s not an investment, but rather social security.
