UAE Unemployment Insurance (ILOE): Who Must Join, What It Pays and How to Claim

Introduction

Who must join the UAE's compulsory unemployment insurance scheme, what it costs and pays, how to claim within 30 days, and how fines are collected.

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Last reviewed 17 October 2026 · 10 min read

In short

The UAE's Unemployment Insurance Scheme, known as ILOE (Involuntary Loss of Employment), is compulsory for almost all private sector and federal government employees, Emiratis and residents alike. The premium is no more than AED 5 a month for a basic salary of AED 16,000 or less, and no more than AED 10 a month above that, plus VAT. After at least 12 consecutive months of subscription, if you lose your job for a reason other than resignation or disciplinary dismissal, it pays 60% of your average basic salary for up to 3 months per claim, capped at AED 10,000 or AED 20,000 a month. You must claim within 30 days, and not subscribing costs a fine of AED 400.

What is the UAE Unemployment Insurance Scheme?

The scheme was created by Federal Decree-Law No. 13 of 2022, issued on 15 September 2022, and employees have had to subscribe since 1 January 2023. The detailed rules are in Cabinet Resolution No. 97 of 2022 and Ministerial Resolution No. 604 of 2022, and Ministerial Resolution No. 340 of 2023 moved the start of fines for not subscribing to 1 October 2023. As of October 2026, the Ministry of Human Resources and Emiratisation (MOHRE) lists Cabinet Resolution No. 97 and Ministerial Resolution No. 604 on its guidance page for the scheme.

It is a government scheme, not a product you choose. The cover is provided by an insurance pool made up of insurance companies, and providers must be licensed by the Central Bank of the UAE and approved by the Ministry. You can subscribe on the official ILOE portal or app, or through other approved channels. In return for a small premium, it pays a limited cash benefit if your employer ends your employment, to support you until you find another job. MOHRE reported more than 6.7 million subscribers in December 2023.

Who must join, and who is exempt?

Subscription is mandatory for all employees in the federal government and private sectors, both UAE nationals and residents, and subscribing and paying the premium is the employee's responsibility, not the employer's. MOHRE says private sector employees whose work permits were issued after 1 October 2023 must subscribe within four months. Ministerial Resolution No. 604 of 2022 counts the four months from entering the UAE on a work entry permit, from a change of status, or from the Ministry's initial approval of the work permit where no change of status is needed.

The UAE Government portal, MOHRE and the ILOE portal describe the scheme as covering the federal government and private sectors, although the English translation of the Decree-Law's definition of an insured person also mentions state government employees. The Decree-Law defines the private sector by who owns the business and does not mention free zones, and the official portal's help text refers to private sector employees with a work permit issued by MOHRE. If you work in a free zone, including the DIFC or ADGM, for a local government, or for a company owned by a federal or local government, confirm with your employer or MOHRE whether you must subscribe.

The groups exempt from the scheme are:

  • investors who own the establishment where they work, described in the Decree-Law as business owners who own the entire business and manage it themselves
  • domestic workers
  • employees on temporary contracts
  • juveniles under the age of 18
  • retirees who receive a pension and have joined a new employer, and Emiratis who have met the conditions for retirement

How much does ILOE cost?

Premiums depend on your basic salary, which the rules call the subscription salary. There are two categories, and a few practical points:

  • First category: basic salary of AED 16,000 or less. The premium is no more than AED 5 a month (AED 60 a year), and the benefit is capped at AED 10,000 a month.
  • Second category: basic salary above AED 16,000. The premium is no more than AED 10 a month (AED 120 a year), and the benefit is capped at AED 20,000 a month.
  • Workers paid on commission, whose contract does not state a basic salary, may choose either category.
  • VAT is added to the premium, and the official portal adds the full VAT amount to the first payment.
  • You can pay monthly, quarterly, every six months or annually, and the official portal offers policies of 1 or 2 years.
  • Subscribing through the official ILOE portal or app costs nothing extra. Other channels, such as business service centres, exchange houses, bank apps, kiosks, SMS and telecoms bills, may add a service charge.

What does ILOE pay, and when does it stop?

A successful claim pays 60% of your basic salary, calculated on the average of the six months before you lost your job, for up to 3 months per claim. The monthly benefit is capped at AED 10,000 in the first category and AED 20,000 in the second. Over your whole working life in the UAE, the benefit cannot exceed 12 months in total, however many claims you make.

Payments stop if you start a new job during the benefit period, and the right to them is lost if you cancel your residence and leave the UAE. If you use the full 3 months, you must subscribe for another 12 consecutive months before you can claim again. If you received less than 3 months, that condition does not apply.

Only basic salary counts, so if much of your pay comes as allowances, the benefit will be well below your take-home pay. For example:

  • basic salary of AED 12,000: AED 7,200 a month, or up to AED 21,600 for one claim
  • basic salary of AED 25,000: AED 15,000 a month, or up to AED 45,000 for one claim
  • basic salary of AED 40,000: 60% would be AED 24,000, so the AED 20,000 cap applies, or up to AED 60,000 for one claim

Who can claim, and how?

Claims are made through the official ILOE portal, its app or its call centre. The ILOE claims guideline has separate routes for private sector employees, federal government employees and employees who are not registered with MOHRE.

Before you submit a claim, your work permit must be cancelled if you work under MOHRE, or your employment number if you work with the Federal Authority for Government Human Resources (FAHR). Private sector claimants are then asked to confirm the cancellation reason and date. Federal government employees and employees not registered with MOHRE enter the reason and their last working date themselves, and upload supporting documents such as their Emirates ID, passport and visa, employment contract, termination letter and bank statement, plus proof that their residence has been cancelled unless they are UAE or GCC nationals or Golden Visa holders.

If you work under a MOHRE work permit, the reason recorded on the work permit cancellation application (dismissal or resignation) is used to decide whether you are entitled, and you are responsible for checking it before you sign. If you believe it is wrong, you can apply with an official dismissal letter showing the date and reason, and the Ministry decides whether you are entitled. If your case went to court, send a copy of the final judgment within 30 days of it.

The insurer must pay within two weeks of receiving a claim that meets the conditions, by bank transfer to the account you choose or for collection at an exchange house with a valid Emirates ID. A claim succeeds only if all of the following apply:

  • you have been subscribed for at least 12 consecutive months and have paid every premium on schedule
  • you lost your job for a reason other than resignation
  • you were not dismissed for disciplinary reasons under the private sector labour law or the federal government's human resources law
  • you claim within 30 days of the end of your employment, or of the court's ruling if your labour complaint went to court
  • there is no open absconding (work absence) complaint against you
  • the claim is not based on fraud or deception, and your employer is not a fictitious business
  • the job loss was not caused by strikes or non-peaceful protests
  • you are legally resident and present in the UAE

What are the fines, and how do they affect gratuity and new work permits?

As of October 2026, the fines are those set by Cabinet Resolution No. 97 of 2022 and Ministerial Resolution No. 604 of 2022, which MOHRE confirmed in November 2023. The fines, and how they are collected, work as follows:

  • AED 400 for failing to subscribe by the deadline
  • AED 200 for failing to pay premiums for more than 3 months after the due date, when the policy is also cancelled
  • A fine not paid within 3 months of its due date is deducted from your wages through the Wage Protection System, from your end-of-service gratuity, or by another method the Ministry accepts.
  • You cannot be granted a new work permit until all fines are paid.
  • You can pay fines free of charge on the MOHRE website or app, or at an approved business service centre for a fee of up to AED 5. You can also apply to pay in instalments, or for a waiver with supporting documents, and MOHRE says it decides within 15 working days.
  • Premiums already paid on a cancelled policy are not refunded, and you still owe the premiums that fell due before it was cancelled. You must buy a new policy, which takes effect from the date of purchase, and the policy terms treat the lapse as a break in your subscription, so you may need another 12 consecutive months before you can claim.

How does ILOE fit into your financial planning?

ILOE is a safety net, not an emergency fund. At most it replaces part of your basic salary for three months, and only after a year of subscription, so it will not cover a longer job search, a resignation or the cost of moving. A practical check is to compare your fixed monthly costs, such as rent, school fees and loan repayments, with 60% of your basic salary, and consider how much accessible savings you would need to cover the gap.

The benefit sits alongside your other entitlements rather than replacing them. The Decree-Law says payments under it do not prejudice any other statutory compensation or entitlements available to you, and the Cabinet Resolution says the cover is paid in addition to any other insurance policy you hold. The law also allows additional benefits to be agreed with the provider on top of the basic package. Our retirement planning guide explains how end-of-service gratuity and workplace savings schemes work.

If losing your job means leaving the UAE, remember that the benefit stops once you cancel your residence and leave. Our checklist for leaving the UAE covers final pay, visa cancellation and bank accounts.

Frequently asked questions

Is ILOE compulsory for expatriates in the UAE?

Yes, for employees in the private sector and the federal government, whether Emirati or resident, unless they fall into an exempt group such as domestic workers, investors who own their business, temporary contract workers, under-18s and pensioners in a new job. Not subscribing by the deadline costs a fine of AED 400.

Can I claim ILOE if I resign?

No. The benefit is only paid if you lost your job for a reason other than resignation, and not after a dismissal for disciplinary reasons. If you work under a MOHRE work permit, the reason recorded on your work permit cancellation application is used to decide your claim, so check it before you sign.

How much will ILOE pay me?

60% of your average basic salary over the six months before you lost your job, for up to 3 months per claim. The monthly benefit is capped at AED 10,000 if your basic salary is AED 16,000 or less, and AED 20,000 above that, with a limit of 12 months of benefit over your working life in the UAE.

What happens if I miss an ILOE premium?

If a premium is unpaid for more than 3 months after its due date, the policy is cancelled and a fine of AED 200 applies. You also still owe the premiums that fell due before the policy was cancelled. A fine left unpaid for 3 months can be deducted from your wages or end-of-service gratuity, and it blocks a new work permit until paid. You then need a new policy, which may mean another 12 months before you can claim.

How Indigo Group can help

Indigo Group can help with wealth management, including retirement planning and risk profiling, for expatriates and UAE residents through our Wealth Management team. We look at how your end-of-service benefits fit alongside your wider finances. For an overview of how we work with expatriates, see financial advice for expats in Dubai. Indigo Group's regulated entity, Indigo Financial Analysis and Consultancy LLC, is licensed by the UAE Capital Market Authority (CMA), licence no. 706042.

Read more about our financial planning for expatriates in Dubai.

To talk this through, book a consultation or message us on WhatsApp.

Written by

Colin Lynam

Managing Director

Colin is an experienced wealth manager with extensive knowledge of the GCC.

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Last reviewed 17 October 2026. This article is for general information only and does not constitute financial, legal or tax advice. Rules change, so please speak to a qualified adviser about your circumstances.

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