The UAE government has launched a new initiative called the Involuntary Loss of Employment (ILOE) scheme to provide assistance to individuals who have been involuntarily terminated from their jobs for reasons other than disciplinary action or resignation. The scheme, which became effective on January 1, 2023, is mandatory for private sector and federal government employees.

The employees must subscribe to the insurance plan for up to one or two years. There are two plans under this scheme: Category A and Category B.

Employees earning a basic salary of Dh16,000 or less must pay Dh5 plus VAT per month (or Dh60 plus VAT per year) for a maximum compensation of Dh10,000 for three months.

Workers earning over Dh16,000 must pay Dh10 plus VAT per month (Dh120 plus VAT per year) for a maximum compensation of Dh20,000 for three months.

Employees in the UAE are eligible for 12 months of compensation during their working lives in the country. However, the benefits will cease once the employee gets a new job within three months of receiving eligible compensation.

If you fail to enroll in the program before June 30, 2023, you will be subject to a fine of Dh400. It’s also mandatory for the employee to be a legal resident of the UAE.